• 504 Debt Refinancing Program Begins June 24th

    Excellent news for small business owners from the SBA! The 504 Debt Refinancing Program begins this Friday, June 24th. The 504 Loan Program was created to provide long-term financing to small businesses for the purchase or improvement of land, buildings and major equipment. The Small Business Jobs Act of 2010 authorized the use of the 504 Loan Program to refinance debt where there was no expansion of the business. However, this program expired on September 27, 2012, so news that the SBA reauthorized the Debt Refinancing Program is very welcome indeed.

    Use of Proceeds

    • Loan proceeds may be used to refinance existing commercial loans whose proceeds were used to acquire fixed assets eligible for the 504 Loan Program.
    • In addition, proceeds may be used to pay business operating expenses, including salaries, utilities, and inventory that were incurred but not paid prior to the date of application or that will become due for payment within 18 months after the date of application.
    • Loan proceeds cannot be used for new expansion purposes, such as equipment or real estate.

    Qualified Debt for Refinancing

    • A commercial loan that was incurred for the benefit of the small business concern not less than two years before the date of the application for refinance.
    • The loan must not be guaranteed by a federal agency.
    • The loan proceeds must have been used substantially (85%) to acquire eligible fixed assets.
    • The debt may consist of a combination of two or more loans, provided that each of the loans satisfies the qualified debt requirements.

    Eligibility Requirements

    • Loan being refinanced must have been current for the past year, with no payments being past due for more than 30 days. You must provide a transcript to demonstrate compliance.
    • The company must have been in business for two years prior to the date of application, and there can have been no change in ownership for at least two years.
    • The borrower must currently occupy 51% of the building being refinanced.
    • The loan must have a positive economic impact, adhering to the 504 Loan Program job creation and retention requirements. Loans that meet a community development or public policy goal do not have to meet the job creation requirement.


    • The maximum loan to value of the refinancing project allowed is 90%.
    • If the debt being refinanced is more than 90% of the value of the eligible fixed asset, the borrower must provide additional cash or other fixed asset collateral acceptable to the SBA so as not to exceed a 90% loan to value of the refinancing project.
    • For projects that include financing business operating expenses, the maximum loan to value amount cannot exceed 75%, and the business operating expenses portion of the loan may not exceed 25% of the value of the eligible fixed asset.

    Community CDC is excited to offer this program to business owners in the communities we serve in Texas and Louisiana.  For more information about the 504 Debt Refinancing Program contact our offices:

    In Texas call Bill Ebersole at 713-457-1650, ext. 201, or email him at bill.ebersole@communitycdc.com.

    In Louisiana, call Jeanne Bergeron at 1-800-462-1017, or email her at jeanne.bergeron@communitycdc.com.

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