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New SBA 504 Debt Refinancing Rules In Effect

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Finally! The long-awaited changes to the SBA 504 Debt Refinance Program are effective now! The Small Business Administration just published new rules that enhance the program in major ways – and now more businesses are eligible to refinance existing expensive commercial debt.

Not every SBA 7(a) loan or 504 loan will qualify. But these changes are opening many more opportunities, including for 7(a) borrowers who would like to take advantage of lower SBA 504 interest rates hovering around 3%.

SBA 504 Debt Refinancing With Expansion

If your commercial real estate or heavy duty equipment expansion project was looking to also refinance current fixed asset debt, the maximum amount of debt that may be refinanced within a 504 project is now 100% of expansion costs, increased from 50%.

Note: 85% of the debt to be refinanced must originally have been used for commercial real estate purchase, construction or improvements.

SBA 504 Refinancing Without Expansion

These permanent changes are truly beneficial to those businesses where commercial real estate or heavy duty equipment financing was put in place at higher interest rates. If you are looking for 100% debt refinance that does not include expansion, you may be eligible for SBA 504 debt refinance if your debt is at least 6 months old at the time of SBA application.

This is reduced from the previous requirement that the existing commercial debt be at least 2 years old. And you can refinance existing government guaranteed debt, including existing SBA 504 loans and 7(a) loans, that would not be able to be modified by the current lender.

Don’t forget: 85% of the debt to be refinanced must originally have been used for commercial real estate purchase, construction or improvements

When it comes to assisting small business recovery and growth, these long-awaited updates to regulations significantly expand the ability of SBA 504 debt refinancing programs to help. Seedcopa will continue to keep you updated on any new developments.


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For almost forty years, Seedcopa + SeedcoDE has helped businesses get the money they need to start, grow and expand. We are proud that the loan programs we work with promote economic development.

Together with economic development partners throughout Pennsylvania and Delaware, we help to grow local businesses, create and retain jobs and stimulate local communities.

Our team has over 75 years of combined government lending experience and a dedication to excellent customer service. After our initial assessment of your project, our commitment is to get you approved and closed.

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