Example Loan Structure Scenarios
Small business owners are able to refinance commercial real estate loans at below-market, fixed interest rates for a 25-year term through TMC Financing’s SBA 504 refinance program. SBA 504 refinance is available for up to 90 percent of the appraised property’s value and multiple properties can be refinanced at once. Refinancing with the SBA 504 loan also gives business owners access to cash for eligible business expenses.
With today’s low rates, TMC Financing has been able to lower a business’ monthly payments and provide access to cash previously tied up in equity. This cash can be used for a variety of business expenses, such as inventory, salaries, utilities, credit card bills, etc.
Learn more about the qualifications for SBA 504 refinance.
Below are some examples of how an SBA refinance loan can be structured to benefit small business owners.
Example 1: Refinance a conventional loan
Borrower seeks to refinance an existing $1,000,000 commercial real estate loan. The property appraises at $2 million.
Acceptable SBA Refinance Loan Structure
Comments: Refinancing a conventional mortgage can allow business owners to take advantage of the favorable below-market, long-term fixed rates of the SBA 504 refinance loan. The new third-party loan must be equal to or greater to the SBA 504 debenture amount, at least $500,000 in this example.
Example 2: Refinance multiple conventional loans
Borrower seeks to refinance an existing $200,000 mortgage used to purchase the property plus an $800,000 second mortgage borrowed five years ago for eligible SBA 504 business purposes. The property appraises at $2 million.
Acceptable SBA Refinance Loan Structure
Comments: Both the original first mortgage and the existing second mortgage can be combined under the favorable terms of the SBA 504 refinance loan. The new third-party loan must be equal to or greater to the SBA 504 debenture amount, at least $500,000 in this example.
There are many acceptable structures for SBA refinance loans, contact us to find a suitable solution to access the equity in your building.