Debt Refinance
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How to Qualify
• Business has been in operation for a minimum of two years
• Business occupies 51% or more of the real estate square footage (investment property is not eligible)
• Real estate is commercial property (residential property is not eligible)
• Loan was entered into a minimum of SIX MONTHS ago
• Loan was originally used to purchase or improve commercial real estate
• Loan is currently financed using conventional bank financing, SBA 504 financing or SBA 7a financing
Debt Refinance Only
You can refinance existing debt up to 90% of the current appraised value.
New appraisal required at application.
Example:
Appraised value: $2,000,000
Existing loan: $1,000,000
Loan-to-value: 50%
Example:
Appraised value: $2,000,000
Existing loan: $1,800,000
Loan-to-value: 90%
Cash Out Refinance
Total Loan-to-Value cannot exceed 85%. Cash out cannot exceed 20% of the appraised value.
Eligible costs that can be paid using the cash out:
Inventory
Accounts payable
Payoff / pay down of line of credit
Payoff of business credit card debt
Working capital expenses
Debt Refinancing Structure Examples:
Appraised value: $1,000,000
85% of appraised value: $850,000
Current debt to be refinanced: $500,000
Available equity for cash out (20% of appraised value): $200,000
Appraised value: $1,000,000
85% of appraised value: $850,000
Current debt to be refinanced: $250,000
Available equity for cash out (20% of appraised value): $200,000
Appraised value: $1,000,000
85% of appraised value: $850,000
Current debt to be refinanced: $850,000
Available equity for cash out: $0 - Maximum 85% already reached
• Please note: Residential properties, leased spaces, development loans, and speculative buildings do not qualify for the 504 loan program