504 Refinance


ffective February 28, 2011 the SBA is accepting requests for refinancing existing eligible loans through the 504 loan program. This is a temporary authorization that will expire on September 27, 2012. Some of the key provisions determining eligibility are:

  • The debt was incurred more than 2 years prior to application date
  • The business must be in operation during all of the 2 years prior to application date
  • Strictly for debt refinancing and cannot involve any expansion or new funds except for professional fees and points or loan fees by the interim lender
  • 85% of the original loan proceeds were for 504-eligible purposes (acquire, construct or improve long-term fixed assets) and 100% of the loan was incurred for the benefit of the small business owner
  • Secured by 504 eligible assets


The regular rules of the 504 loan program still apply such as 51% owner occupancy, $5 million maximum 504 portion ($5.5 Million for Manufacturers), for profit company with less than $15 million in net worth and averaging less than $5 million in net income over the last two years.

In addition there are new rules determining the split in financing between the Bank, the EDC and the borrower. Under Refinancing rules the split is based off of the Appraised value of the assets being refinanced. Therefore an updated appraisal dated within 6 months of the application and directed to the bank and the EDC is required with the application. A worksheet for determining the financing breakdown is available in the 504 Refinance Application PDF.

A 504 Refinancing Loan must be funded within 6 months of the approval date so timely submission of all required information is essential. For a complete list of these items please see the attached PDF for our 504 Refinance Application.