The SBA 504 Program

The SBA 504 program is a refinancing program for owner-occupied commercial real estate. It will be available starting in mid-2016, and will likely be a popular choice amongst small-business owners who also own their own real estate.  If you’re looking to refinance your commercial property, it might be worth looking into the SBA 504 program.

To qualify, your commercial property must be owner-occupied, and the project cost cannot exceed $15,000,000. Moreover, you need to be able to put 10% down.

If you qualify for financing under SBA 504, you will get a fixed-interest rate (presumably lower than conventional financing, although that remains to be seen). You will essentially have two mortgage liens on your real estate.  The first lien will be for 50% of the total project cost.  The second lien will cover an additional 40% of the project cost, but it will be 100% guaranteed by the SBA.

The program was approved by Congress already, and should be available soon if it isn’t yet. If you’re not in a rush and you’re looking to refinance, the SBA 504 program might be a great option for you.