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504 Debt Refinancing Program

Release Date: 
Monday, July 25, 2016
Release Number: 

The Small Business Jobs Act of 2010 temporarily expanded the ability of a small business to use the 504 Certified Development Company (CDC) Loan Program (504 Loan Program) to refinance certain qualifying existing debt. This temporary debt refinance program expired on September 27, 2012.

On December 18, 2015, the Consolidated Appropriations Act, 2016 (the Act) made a permanent change to the 504 Loan Program, authorizing the Program to be used for debt refinance in any year that the 504 Loan Program is at zero subsidy. SBA began accepting 504 Debt Refinancing Loan applications on June 24, 2016.

Loan Structure and Use of Proceeds

The refinancing loan is structured like SBA’s traditional 504 loan. Typically, a 504 project includes three elements:

  1. A loan (or first mortgage) secured with a first lien from a private-sector lender covering 50 percent of the project cost,
  2. A second mortgage secured with a second lien from an SBA Certified Development Company (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost,
  3. And a contribution of at least 10 percent equity from the small business borrower.

Borrowers are able to refinance up to 90 percent of the current appraised property value. The refinancing may also include Eligible Business Expenses, with a maximum Loan to Value of 75 percent.


To be eligible for the 504 Refinancing Program, a business must have been in operation for at least two years.

The debt to be refinanced must be a commercial loan:

  • That was incurred for the benefit of the small business concern not less than 2 years before the date of the 504 Debt Refinancing application.
  • The proceeds of which were used to acquire a 504 eligible fixed asset (i.e., owner-occupied real estate, land, equipment, etc.).
  • That is secured by 504 eligible fixed assets.
  • For which the borrower has been current on all payments for at least the last 12 months prior to application.

Existing 504 projects and government-guaranteed loans are not eligible to be refinanced.

Traditional 504 Loan Program regulations apply to the 504 Debt Refinance Program.

For more details, go to