{"id":7531,"date":"2024-10-21T11:43:21","date_gmt":"2024-10-21T11:43:21","guid":{"rendered":"https:\/\/listselfstorage.com\/us\/industry-insights\/?p=7531"},"modified":"2026-02-13T10:27:24","modified_gmt":"2026-02-13T10:27:24","slug":"sba-504-refinance-rule-changes","status":"publish","type":"post","link":"https:\/\/listselfstorage.com\/us\/industry-insights\/sba-504-refinance-rule-changes\/","title":{"rendered":"SBA 504 Refinance Rule Changes"},"content":{"rendered":"<p><!-- VideographyWP Plugin Message: Automatic video embedding prevented by plugin options. --><br \/>\n<img loading=\"lazy\" class=\" wp-image-7536 aligncenter\" src=\"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-content\/uploads\/2024\/10\/SBA-Loan-Changes-1.png\" alt=\"\" width=\"554\" height=\"215\" \/><\/p>\n<p><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">The SBA\u2019s rule changes, effective November 15, 2024, will help loan clients in a number of ways, including making it easier to refinance debt.<\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">Also, the new rule change broadens the way businesses can use funds through refinancing, especially when the<\/span><\/span><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">y\u2019<\/span><\/span><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">re looking to expand.<\/span><\/span><\/span><\/p>\n<p><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">1) For Stand-Alone Debt Refinance (Without Expansion):<\/span><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">The loan-to-value limit is now up to 90% in all cases including requests for \u2018cash out\u2019 for other business expenses and special use properties.<\/span><\/span><\/span><\/li>\n<li><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">In addition, the 20% LTV cap on cash out for other business expenses is GONE! Cash-out can now take the project up to 90% LTV! As a reminder, \u2018cash out\u2019 for other business expenses can be used to pay down the business\u2019s line of credit, business credit cards (borrower needs to certify the funds were used for business purposes), and\/or future operating expenses of the business coming due within the next 18 months.<\/span><\/span><\/span><\/li>\n<li><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">Finally, the program will again allow to refinance certain \u201cother secured debt\u201d within the project. For example, if you extended a working capital term loan secured by the real estate being refinanced into a 504 structure, it can now be rolled into the 504 refinance project. Previously, this was not allowed.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">2) General Changes for Refinance Projects (With or Without Expansion):<\/span><\/span><\/span><\/p>\n<ul>\n<li><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">The \u201csubstantially all\u201d standard for 504 debt refinancing with expansion is now consistent with 504 debt refinancing without expansion. The standard is now 75% fixed asset use for the original, qualified debt for both programs.<\/span><\/span><\/span><\/li>\n<li><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">With revisions to the \u2018substantial benefit\u2019 test for 504 debt refinancing, we now have the flexibility to allow any payment improvement to meet the requirement which will expand borrower access. Note that balloon notes automatically qualify.<\/span><\/span><\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\"><i><u>Contact<\/u><\/i><\/span><\/span><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">:<br \/>\n<\/span><\/span><\/span><span style=\"font-size: medium;\"><b><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">Nick Collins<br \/>\n<\/span><\/span><\/b><\/span><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">Bank Five Nine<br \/>\n<\/span><\/span><\/span><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">Commercial Lender \u2013 VP<br \/>\n<\/span><\/span><\/span><span style=\"font-size: medium;\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\">262-560-2016<br \/>\n<\/span><\/span><\/span><span style=\"font-size: medium;\"><a href=\"mailto:nick.collins@bankfivenine.com\" target=\"_blank\" rel=\"noopener noreferrer\"><span style=\"color: #222222;\"><span style=\"font-family: Lato, Helvetica Neue, Arial, Helvetica, sans-serif;\"><u><b>nick.collins@bankfivenine.com<\/b><\/u><\/span><\/span><\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The SBA\u2019s rule changes, effective November 15, 2024, will help loan clients in a number of ways, including making it easier to refinance debt. Also, the new rule change broadens the way businesses can use funds through refinancing, especially when they\u2019re looking to expand. 1) For Stand-Alone Debt Refinance (Without Expansion): The loan-to-value limit is now up to 90% in all cases including requests for \u2018cash out\u2019 for other business expenses and special use properties. In addition, the 20% LTV cap on cash out for other business expenses is GONE!&hellip;<\/p>\n","protected":false},"author":13,"featured_media":7535,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[21],"tags":[],"gutentor_comment":0,"_links":{"self":[{"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/posts\/7531"}],"collection":[{"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/users\/13"}],"replies":[{"embeddable":true,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/comments?post=7531"}],"version-history":[{"count":4,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/posts\/7531\/revisions"}],"predecessor-version":[{"id":7538,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/posts\/7531\/revisions\/7538"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/media\/7535"}],"wp:attachment":[{"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/media?parent=7531"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/categories?post=7531"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/listselfstorage.com\/us\/industry-insights\/wp-json\/wp\/v2\/tags?post=7531"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}