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SomerCor SBA 504 Program

4.49% All-in 20-year fixed rate for eligible refinances.

1. SBA has waived the 12/31/2012 Debt Maturity Requirement.  Eligible Debt can be refinanced regardless of the maturity date!

2. A borrower can use the SBA 504 program to refinance existing debt up to 90% of the current fair-market value without additional collateral.

3. The debt being refinanced must have been incurred more than 2 years ago and must be current (no payments >30 past due and no deferments in the last 12 months)

4. The debt being refinanced must have been incurred for the benefit of the small business and must have been used for eligible 504 project costs (i.e. Fixed Assets).

5. The bank must finance 50% of the current appraised value and the SBA will finance up to 40% of the current appraised value (The 504 program will not work for the refinance of significantly over-collateralized debt).

6. The interest rate on SBA 504 Refinance Projects is approximately 30 basis points higher than the interest rate on SBA 504 Purchase projects but still either a 10-year or 20-year fixed rate.

7. The SBA 504 Debenture must fund within 6 months of SBA Application Approval. Please keep this in mind in regards to the timing of Environmental Reports.

8. A current (within 6 months) appraisal (naming the SBA and SomerCor as intended users) and all notes/lien instruments for the debt being refinanced must be submitted to SomerCor prior to submission to the SBA.

9. "Cash-out” refinances are not currently allowed as part of the program – SBA sought public comment on the new refi program with comments due 5/18/11 – they may allow cash-out refinances in the very near future and the up-front appraisal requirement might disappear completely; at least that’s what we are hearing!"

10. All other existing SBA 504 guidelines (Occupancy, Community Development/Job Creation, etc.) must still be met through this refinance program.

For more information, contact SomerCor.com
Last Updated on Monday, 12 September 2011 08:13