Big Sky Finance – June 2020 Newsletter – SBA 504 Loan Debt Refinancing With Expansion

The SBA 504 loan program can be used to refinance existing commercial debt. Last month’s newsletter reviewed refinancing debt without expansion. There is also a debt refinance option if a business is planning to expand.

For debt refinancing with expansion, eligible debt can be refinanced if the amount does not exceed 50% of the cost of expansion (in other words, the expansion costs must be at least 2x the amount of debt being refinanced). The eligible debt includes commercial loans that were substantially (85% or more) used to finance fixed assets such as land, buildings or equipment. The expansion may include the acquisition, construction, or improvement of land, buildings, or equipment for use by the small business.