RDC webinar – 504 Loans during the COVID-19 crisis
| Play recording (35 mins) | |
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 two years ago
- Loan has been current for past 12 months
- Loan was originally used to purchase or improve commercial real estate
- Loan is currently financed using conventional bank financing (government backed loans not eligible, including SBA 7a, SBA 504 1st and 2nd mortgages, USDA loans)
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 |