• No cash-out option available. • Debts proposed for refinancing must have 12 months or more of on-time payments. WHY BANKERS SHOULD LEVERAGE THE SBA 504 REFINANCE PROGRAM This program isn’t just a refinancing tool — it’s an opportunity to strengthen client relationships and grow your portfolio: • Deliver Tangible Value: Help your borrowers secure lower rates, reduce monthly payments and unlock cash flow for reinvestment, demonstrating your commitment to their success. • Enhance Client Retention: Providing solutions like SBA 504 refinancing sets you apart as a trusted advisor, fostering long-term loyalty. • Boost Portfolio Performance: Offering fixed-rate, long-term financing benefits not only your borrowers, but also your institution’s stability and growth. The SBA 504 refinance program is a powerful tool for small businesses to reduce costs and fuel growth. If you’re seeking a pathway to financial stability and expansion, consider exploring this option with a Certified Development Company. • Commercial real estate debt being refinanced needs to be on permanent terms and in place for at least six months. • Cash out can’t fund any equipment purchase, property renovation/construction or fund any business acquisition. It’s limited to funding business-operating expenses or debts used for business-operating expenses. • Generally, on-time payments for debts proposed for refinancing 504. 504 REFINANCE WITH EXPANSION This program provides a business the opportunity to refinance existing commercial real estate debt meeting the 75% test, and utilize the existing equity to help fund a planned expansion. The total loan to value can go up to 90% but may be lower if the business has less than two years of operating history or the property has limited use. The refinance amount is capped at the amount equal to the expansion dollars. For example, if a business needs $1 million to fund an addition to its existing commercial property, it can refinance up to $1 million in existing commercial real estate debt. A lowered payment on the refinanced portion must be achieved as a result of the refinance if the existing debt isn’t structured with a demand or balloon feature. Key Points • Expansion funding with the ability to refinance existing debt, up to 90% LTV. • There isn’t any minimum length of time the operating business has generated revenue, but it needs to demonstrate the ability to expand and project debt service coverage. The SBA 504 refinance programs empower you to provide clients with long‑term, fixed-rate solutions while generating new lending opportunities. Utah Banker 27
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