SBA 504 refinance loan program

Refinance debt previously incurred for commercial real estate and fixed-asset projects at below-market rates

If you’ve purchased a building, land or a piece of large equipment for your business, you know that it can be a significant investment. But what if you financed the purchase with a conventional loan and you want to refinance?

When most people think of SBA programs, they think of loan programs that fund new and less established businesses. However, the SBA 504 loan refinance program is different because it’s purpose is to make borrowing more affordable for a wide variety of businesses with the goal of sparking community change. Learn more about how the 504 refinance program can help your business grow.

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Below-market, fixed interest rates

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Terms up to 25 years

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Reduced monthly debt payments

What is the SBA 504 loan refinance program?

An SBA 504 loan can be used to refinance debt previously incurred for commercial real estate and fixed-asset projects at below-market rates. With the SBA 504 loan refinance program, you can not only refinance debt but also cash out up to 20% of the value of the property for working capital needs. You can refinance up to 100% of eligible expenses for a prior fixed-asset project at below-market rates with a term of up to 25 years. A 504 refinance loan is unique because it always needs to be combined with a bank loan. Here’s how a typical SBA 504 loan refinance program works:

  • A bank refinances 50% of project costs with a traditional loan
  • Pursuit refinances up to 50% of project costs using the 504 loan program
  • An “as is” fair market value appraisal will need to demonstrate over 10% equity in the property with the proposed financing.

If you have a bank on hand for the first mortgage, we’ll work with them to incorporate the SBA 504 loan refinance program into your debt refinance plan. If you don’t, we can point you towards a bank that’s familiar with the 504 refinance loan program.

Program details

  • Loan amount: $50,000 up to $5.5 million for the SBA 504 loan refinance program component of the loan. That means that substantially bigger projects can be refinanced using the SBA 504 refinance program
  • Terms: Available terms include 10- 20- and 25-years
  • Interest rate: Interest rates are fixed at below-market rates. View current rates
  • Time to funding: Your 504 refinance loan will be funded around the same time as your first mortgage (bank loan)

Is the 504 refinance loan program right for me?

If you’re looking to refinance an owner-occupied commercial real estate or another type of fixed asset purchase, you may be a candidate for the SBA 504 loan refinance program. Get started online and we’ll reach out to talk individually about your financing needs and determine if the 504 refinance program is right for you.

Recent changes to the 504 Refinance Program now make it eligible to refinance a loan even if it is an existing SBA 7(a) or SBA 504 loan. Here are the general SBA 504 refinance guidelines:

  • Debt must have been incurred for an owner-occupied commercial real estate, land, or equipment purchase or a renovation
  • Debt was incurred more than 6 months ago
  • Your business must be in operation for 2 or more years 
What can you use the SBA 504 loan refinance program for?

The SBA 504 loan refinance program is versatile and can be used to refinance a variety of fixed-asset expenses, such as:

  • Owner-occupied commercial real estate, such as an office, manufacturing facility, or storefront
  • Land purchase
  • New construction
  • Renovation
  • Heavy machinery or equipment purchase

You can also cash out up to 20% of the property value and use the funds to pay off credit cards, pay down payables or create cash to pay for future operating expenses. Other business expenses, such as salaries, rent, utilities and inventory can be included in the same loan. Your lender can help you understand if your expenses are eligible.

The SBA 504 refinance loan program is administered by Pursuit CDC

Find the right loan for your business today

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