2025-2026 Pub. 15 Issue 2

The Hidden Growth Tool in Your Loan Portfolio HOW TO SPOT SBA 504 OPPORTUNITIES BEFORE YOUR COMPETITORS DO By B:Side Capital For lenders, the SBA 504 program isn’t just another product to place on the shelf. It’s a lever for deeper relationships and stronger portfolios. The most successful institutions are the ones that anticipate borrower needs before the client even recognizes the opportunity, positioning themselves as both advisor and capital partner. With this in mind, how will you know when you’ve come across a potential SBA 504 project? We’ve compiled a list of quick tidbits on what to look out for. • How to Spot an SBA 504 Borrower ○ Owner-occupied commercial real estate at least 51% occupied by the borrower’s business (60% for new construction). ○ Businesses looking for long-term, fixed-rate financing to stabilize cash flow. ○ Owners wanting to preserve working capital with a low down payment (as little as 10%). • More Than Just New Purchases. Think Refinance. ○ The SBA 504 Refinance with Expansion Program allows for refinancing existing qualified commercial real estate or heavy equipment debt while funding the new expansion. ○ Expansions (including bank, closing and professional fees) must be at least 50% of the total project costs and can include building additions, facility upgrades or new equipment purchases. ○ Project Example: A manufacturer can refinance their current owner-occupied building loan and add a new production line in one transaction. • 504 Refinance Without Expansion: Property Refinance + Cash Out ○ Allows refinancing of existing qualified commercial real estate debt without a requirement for expansion. » Borrowers can consolidate debt from multiple lenders into a single long-term fixedrate package. » Cash Out Available: Give your borrower the ability to use property equity to pay off business credit cards, lines of credit or cover up to 18 months of operating expenses, all while locking in a stable long-term rate. Financing is available up to 90% loan-to-value, based on a current appraisal. » Project Example: A medical practice can refinance its current building loan, pay off its stale line of credit and access additional working capital for growth initiatives, all in one SBA 504 transaction. Colorado Banker 18

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