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Refinancing a Non-SBA Commercial Real Estate Loan? Turn to the SBA 504 Refi’s Low Rate for Savings

June 18, 2020 | SBA 504 Loans
Business loans, business loan, capital, CDC Small Business Finance, SBA, business loan, small business, startup loan, small business financing, Small Business Administration, Small Business Administration loan, equipment financing, SBA 504, SBA 504 loan, commercial real estate, refinancing

The SBA 504 Refinance Program offers small business owners, who own the building their business occupies, the opportunity for refinancing their existing non-SBA guaranteed commercial loan to a more affordable and beneficial SBA 504 loan. 

The SBA 504 Refi and the SBA 504 are part of the U.S. Small Business Administration slate of loan programs that business owners can obtain through approved lenders. The SBA 504 is specifically for business owners looking to purchase commercial real estate and/or large equipment to help them expand or modernize their operations.

SBA 504 options include 10-year, 20-year and 25-year terms. The SBA 504 Refinance program loan is intended to refinance existing non-SBA guaranteed commercial debt.

SBA 504 Refinance Program Loan

The SBA 504 Refinance Program gives business owners the option to refinance one or more non-SBA guaranteed commercial loans. Better yet, with SBA 504 Refi interest rates falling to historic lows, now is the time to take advantage of the opportunity to save money on monthly mortgage payments with a simple straight refinance of the current balance or by refinancing current balance, take out allowable cash equity, and with the prevailing interest rates and terms possibly having lower or equal mortgage payments you have today. Refinance frees up cash for other business needs – offering the right time to finance growth.

Crucially, though, for many business owners, it can be a tool to support recovery from the ongoing impacts of the coronavirus. Stay-at-home orders hit the bottom lines of many small businesses hard. An SBA 504 Refi loan could generate needed cash at the perfect time.

“By refinancing, small business owners lower their monthly payments, which improves their cash flow,” said Mike Owen, CDC Small Business Finance’s chief credit officer. “That gives them more cash to pump back into their business, which can drive recovery, growth or expansion.”

Below-Market Interest Rates 

Effective rates for the SBA 504 Refinance Program (effective June 11 – July 8, 2020):

Effective rates for the SBA 504 loan (effective June 11 – July 8, 2020) are just as attractive:





Key guidelines  •  Eligible project costs

Expenses  •  How to evaluate eligibility

Loan-to-value limits  •  Steps to qualify existing debt

SBA 504 Refinancing Options 

Straight refi: Small business owners can refinance up to 90% of the property’s appraised value. In other words, the loan-to-value can be as much as 90% of value even when you are combining multiple term loans secured against the property into a single loan.

Cash-out refi: Borrowers can tap into their equity to use as working capital for their business to cover costs such as hiring, inventory and day-to-day operations. In this case, the maximum loan-to-value is 85%. As much as 20% of the appraised value can be tapped as working capital.


Requirements for the SBA 504 Refinance Program

Eligible Project Costs


And remember, any small business owner who is interested in the SBA 504 Refinance Program can be prequalified fast – in just 24 hours. Contact a loan expert at CDC Small Business Finance to start now.

Whether for cash flow to fuel recovery or growth, the SBA 504 Refinance Program can be the right answer for your small business financing needs. And the impressively low rates may be an even bigger incentive to choose to refinance now.

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CDC Small Business Finance is a trusted small business lender, award-winning nonprofit and advocate for entrepreneurs. Over more than four decades, we have provided $18 billion in funding to over 11,000 borrowers … and counting. Unlike a traditional lender, we have the flexibility to offer affordable loans to underserved small business owners. Our lending also plays a role in bolstering economic development, and has helped to create or preserve more than 200,000 jobs in California, Arizona and Nevada.

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