April 2020
Commercial Lending
Debt Refinancing + Rock Bottom Interest Rates AND CARES Act Payments = Significant Savings for Small Businesses

Small Business Administration (SBA) 504 loan fixed interest rates currently remain among the lowest in program history (3% and under), making this a very affordable opportunity for small business owners to refinance commercial mortgage and other business related debt with or without a cash-out option under the 504 Debt Refinancing Program.

Under the CARES Act, for new loans that fund through Sept. 27, 2020, the SBA will make six 2nd mortgage grant paymentsAdditionally, under the CARES Act, for new loans that fund through Sept. 27, 2020, the SBA will make 2nd mortgage grant payments, for a 6-month period beginning with the first payment due on the covered loan.  These payments are grants that borrowers will not be required to repay.  A lender may grant the borrower an immediate deferment on these new loans (in accordance with the applicable SOP provisions) in which case the 6-month period of SBA payments will begin after the deferment ends.

Under the 504 Debt Refinancing Program, small businesses can refinance up to 90% of the appraised value of commercial real estate property (no cash out) with repayment terms up to 25 years.  Eligible fixed assets include land, buildings, machinery and equipment that were acquired, constructed or improved by a small business for use in its business operations.

Borrowers can also refinance eligible business operating expenses (cash-out option), however a maximum 85% LTV applies and the business operating expenses portion of the project may not exceed 20% of the value of the eligible fixed asset(s) securing the qualified debt.

Eligible business operating expenses include any other expenses of the business that are not capital expenditures (e.g., salaries, rent, utilities, inventory, etc.) that were incurred but not paid prior to the date of the refinance application or that will become due for payment within 18 months after the date of application.

504 refinancing costs may also be included in the loan.  Existing 504 loans and other government guaranteed loans are not eligible.

Click here for complete details about the SBA 504 Debt Refinancing Program.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@FloridaFirst.com.  Phone: 850.681.3601 or toll-free at 800.504.LOAN.