RDC webinar – New 504 Debt Refinance Program, August 2021
Play recording (28 mins) | |
View the Slide Deck | |
Contact Niccole Zell at niccole@rdc504.org to apply
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 Refinance 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 |
