• Refinance Existing Loans with the 504 Debt Refinancing Program

    The SBA 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 504 Debt Refinancing Program allows those who already have such debt, through a non-SBA loan, to refinance it into long-term, fixed-rate loans. This program is invaluable to entrepreneurs and small business owners who need to reduce their high-cost debt, including adjustable-rate debt.

    Under the 504 Debt Refinancing Program banks are more willing to do the refinancing, and small businesses can get the financing done without a large out-of-pocket expense. Reducing monthly capital expenditures lets small businesses keep the valuable real estate that allows them to grow.

    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 with no modifications 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 Business Finance is excited to offer this program to business owners and lenders in the communities we serve in Texas and Louisiana. For more information about the 504 Debt Refinancing Program contact our offices:

    In Louisiana, call Jeanne Bergeron at 1-800-462-1017, ext. 203, or email her at jeanne@communitybusinessfinance.com.

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


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