Small Business Administration 504 (SBA 504) Refinance

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SBA 504 Refinance Program Summary

  • Provides small businesses with assistance in restructuring long-term, fixed rate financing for strategic initiatives or to unlock available equity in their commercial assets.  
  • Loans are available to most for-profit businesses for qualified projects that result in the creation or retention of jobs.
  • Administered through a partnership with the EDC Finance Corporation

Key Benefits

  • 10 or 20 year fixed rate options
  • Loan to value up to 90% on straight refinance
  • Loan to value up to 75% on cash out refinance
  • Subordinate financing to primary lender

Eligible Businesses

Sole proprietorships or small businesses (tangible net worth <$15 million and 2-year average net income <$5 million) including:

  • Most for-profit, small businesses (500 employees or fewer)
  • Agriculture production

Uses and Purposes of Funding

  •  Refinance existing commercial mortgages over 2 years old
  •  Refinance of other commercial loans secured by fixed assets
  •  Fund operating expenses incurred, but not already paid
  •  Fund future operating expenses to be paid in the next 18 months

Interest Rate

  • Market interest rate based on prevailing Treasury notes plus a fixed rate spread


  • 20-year fixed rate term for real estate
  • 10-year fixed rate term for machinery and equipment
  • 10% equity required
  • 15% equity required for start-up projects


  • Loans are made in conjunction with a loan secured from a private lender with a senior lien covering up to 50% of eligible refinance amounts and operating expenses
  • SBA 504 Loan will be placed in a subordinate position for up to 50% of the eligible refinance amounts and operating expenses
  • Operating expenses are limited to no more than 25% of the value of the fixed asset collateralizing the loan
  • Borrower may provide cash or other fixed asset collateral if necessary to meet the loan to value requirements


  • Loans up to $5,000,000 or 50% of total eligible refinance amounts and operating expenses, whichever is less
  • Loans up to $5,500,000 or 50% of total eligible refinance amounts and operating expenses, whichever is less for certain qualifying projects

Job Creation and Retention

  • Create or retain one full-time job for every $65,000 borrowed, $100,000 for manufacturers


  • 2.2% commitment and underwriting fee (debenture funded)
  • 0.5% participation fee based on first mortgage loan amount (out-of-pocket)
  • $3,000 closing cost and recording fees (debenture funded)
  • Title insurance is required for real estate transactions

SBA 504 Partnership

The York County Economic Alliance (YCEA) and the EDC Finance Corporation (EDC Finance) have partnered together to offer SBA 504 loans to York County businesses. YCEA provides a reliable, local loan origination point of contact for the York County business and their bank partner. YCEA staff processes the application and is the borrower’s point of contact during all stages of the 504 loan approval. EDC Finance provides the structuring expertise, credit underwriting and maintains the back office functions related to closing and servicing the loans. There are several key components exclusively offered through the partnership:


  • YCEA serves as the primary local contact for all York County 504 loans
  • EDC Finance maintains a voting York County representative on its loan committee
  • YCEA staff attends and provides local decision making input to the EDC Finance loan committee
  • 25% of all loan fees and a portion of the interest rate stay in York County to support future economic development efforts