SBA 504 Refinance Program

The SBA 504 Refinance Program is designed to assist small businesses in refinancing eligible fixed assets that were originally financed with a commercial loan.

How Do You Qualify?

The SBA 504 Refinance Program is designed to assist small businesses in refinancing eligible fixed assets that were originally financed with a commercial loan.

To qualify for the program, businesses must have been in operation for at least two years and have a satisfactory payment history. Additionally, they must demonstrate a positive economic impact by creating or retaining one job for every $90M of 504 debenture amount, or every $140M for manufacturing companies.

Refinancing should provide a “Substantial Benefit“ to the applicant as evidenced by 10% monthly payment savings or elimination of a balloon note. This program aims to provide small businesses with an opportunity to refinance their existing debt and improve their financial situation.

How Can You Use 504 Refinance Money?

The SBA 504 Refinance Program allows eligible businesses to refinance loans, including government-guaranteed debt, with “cash out“ options up to 20% of eligible fixed assets’ appraised value, including closing costs and interim loan interest.

Refinancing “Qualified Debt“
The program allows for the refinancing of two or more loans that meet specific criteria. To be eligible, at least 85% of the original use of the proceeds from the refinanced loans should have been used for SBA 504-eligible expenses, which include fixed assets and related costs.

The debt being refinanced must have been incurred at least six months ago and should be for the benefit of the small business applicant.

Under the program, existing government guaranteed debt, such as SBA 7(a), SBA 504, USDA loans, and others, can be refinanced if they meet the eligibility requirements.

Eligible Business Expenses
A portion of the refinancing proceeds, not exceeding 20% of the appraised value of the eligible fixed assets being refinanced, can be used for “cash out“ purposes. However, these funds cannot be used for capital expenditures. Instead, they can be utilized to pay off business lines of credit or credit card debt (in some cases), and to cover future operating expenses. Loans providing cash out, cannot exceed a 85% loan to value.

Eligible Closing Costs, Bank Fees, and Interim Loan Interest
The SBA 504 Refinance Program also allows for the inclusion of eligible closing costs, bank fees, and interim loan interest as part of the refinancing package.

How is the 504 Loan Structured?



  • In some cases where the building is multi-use and the loan-to-value is below 90%, the lender’s portion may be less than 50%.
  • Borrower negotiates the terms with the Lender, however, Lender’s loan term must be at least 10-years on 20/25 year loan and 7-years on 10-year loan.



  • 504 loan cannot exceed $5 million, or $5.5 million for a Small Manufacturer.
  • 504 fully amortizing loan for 10, 20, or 25-Years.
  • Rate Fixed at 504 Loan Funding
  • Fees on the 504 loan total approximately 2.17% of the loan amount and 0.5% of the first mortgage loan amount. 



  • Borrower contributes a minimum 10% in equity. Typically in the form of the eligible fixed assets being refinanced, or if needed, additional cash or equity in additional collateral. 

Like the original 504 Loan program, terms of 10, 20, and 25-years are available, based on the useful life of the collateral assets.