SBA 504 Loan Refinance Program Explained

Everything you need to know about the new SBA 504 Refinance Program, condensed and simplified by the Experts in SBA 504 Loans.


	Has the debt been outstanding for at least 2 years?
	Has the subject business been in operation for at least two years?
	Has the borrower been current (no past dues of more than 30 days) on the note for the past 12 months (even if the note has been modified, borrower must be “current” on modified note)?
	Was the debt to be refinanced substantially (85% or more) used for eligible 504 purposes originally (owner-occupied commercial real estate, heavy machinery, equipment, and closing costs related to the project)?

If you answered “YES” to the above questions, or if you have any other questions we can help answer, contact us TODAY so we can get started!

	Itemized Business Expenses (such as salaries, rent, utilities, inventory, paying-down payables and other obligations of the business) are eligible.
	Maximum LTV is 90%. Additional collateral (real estate and/or equipment) can be pledged to supplement shortfall on project collateral.
	The amount of total financing cannot exceed 90% of the fair market value of the fixed assets securing the loan or the outstanding principal balance of the debt being refinanced, whichever is lower.
	The SBA 504 loan will equal the difference between the equity in the collateral (must be at least 10%) and the first mortgage loan.
	The borrower’s contribution may be satisfied by its equity in the collateral being offered to the SBA.
	An appraisal on all collateral, dated within 6 months of application date, must be submitted to the SBA with application [we'll engage the commercial appraiser(s)].
	No refinancing of existing SBA 504 projects, SBA 7(a) loans or USDA loans.
	No refinancing where the creditor on the debt is in a position to sustain an involuntary loss.
	This program is for refinancing only. No expansion or purchase of real estate or other fixed assets (those can be part of a new 504 loan).
	Refinance loans must be approved by 9/27/12.
	There has been $7.5 billion allocated for this program in SBA-guaranteed second mortgages.

Call 1-866-622-4-504 (toll free), email info@MercantileCC.com, or complete the form to the right.

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