SBA 504 LOAN
According to a statement released by Coast Commercial Credit, the Small Business Administration has announced the implementation of the SBA 504 Refinance Program. The SBA will start processing requests on June 24, 2016.
The 504 Loan provides financing for major fixed assets such as equipment and real estate. The loan is actually comprised of two separate loans (approximately 40 percent SBA and approximately 60 percent conventional). The financing on the SBA portion of the loan is fixed for the entire term of 20 years. The conventional portion has a 20- to 25-year term, Coast reports.
Loans can equal up to 90 percent of the value of the collateral pledged and can include additional business expenditures for remodeling, new equipment, working capital, or other business-related expenses. Borrowers can even consolidate business debt.
The program can only be used to refinance conventional loans. Government backed debt (SBA, USDA or similar) is ineligible. The property must be at least 51 percent owner occupied. The note(s) being refinanced must be at least 24 months old and the business must have been operating under the same ownership for at least two years. The note(s) being refinanced must have been current for at least the past 12 months. As always, all requests and terms are subject to final credit approval.