Due to recent changes from the Small Business Jobs Act, much has changed with regards to SBA loans in general and with the popular SBA 504 loan. SBA 504 loan refinances are now allowed. However the program is set to expire in September of 2012. Get your loan in process by June/July.
This means long term fixed rate financing, up to 90% loan to value, at historically low rates, is now available for business owners that already own their building. Before the changes, borrowers with high leverage situations were either out of luck, or only eligible for SBA 7a loans. The 7a program is a solid loan, but it’s normally structure with a quarterly adjusting rate, being tied to Prime. Many borrowers do not like this. Again, borrowers are now able to enjoy long term fixed rate financing of up to 25 years and at 90% financing with the SBA 504 refinance program.
The funds are limited, and the program expires on September 27, 2012, so we are recommending to our clients to get started now, as funding’s will occur based on when the application was received.
SBA 504 Loan Refinance
The SBA 504 loan can be used to refinance existing mortgage debt, equipment loans and other businesses expenses. The total loan amount can go up to $13 million and we will go as low as $750,000.
- Up to 90% loan to value.
- Fixed rates from 5 to 25 years.
- Your business needs to occupy at least 51% of the subject building.
- Virtually all building types are allowed.
- Credit scores as low as 650 (or lower with common sense reason).
What makes the SBA 504 refinance such a huge loan program? Long term fixed rates… at the highest levels of financing, with below market rates is the answer. There are no other loans out there that fit this niche. Conventional bank loans for example, normally only go up to 65% loan to value, in this market, not 90% like the SBA 504 loan.