Small Business Administration (SBA) 504 Refinance loans are provided through EDC Finance Corporation in conjunction with the United States Small Business Administration to assist businesses with restructuring long-term, fixed-rate financing for strategic initiatives or to unlock available equity in their commercial assets.

Key Benefits

  • 10 or 20 year fixed rate options
  • Loan to value up to 90% on straight refinance
  • Loan to value up to 85% on cash out refinance
  • Subordinate financing to primary lender

Funding Uses & Purposes

  • Refinance existing commercial mortgages over 2 years old
  • Refinance of other commercial loans secured by fixed assets
  • Fund operating expenses incurred, but not already paid
  • Fund future operating expenses to be paid in the next 18 months

Eligibility

Borrowers must be for-profit businesses or farms with a tangible net worth < $15 million and 2-year average net income < $5 million

Loan Structure

  • A commercial bank will provide senior financing for at least 50% of eligible refinance amounts and operating expenses
  • EDC Finance will provide an SBA 504 loan in a subordinate position for up to 50% of the eligible refinance amounts and operating expenses
  • Operating expenses are limited to no more than 25% of the value of the fixed asset collateralizing the loan
  • Borrower may provide cash or other fixed asset collateral if necessary to meet the above loan to value requirements

Amounts

  • $5 million maximum loan amount for most borrowers up to 50% of eligible refinance amounts and operating expenses
  • $5.5 million maximum loan amount for manufactures & certain energy efficient projects up to 50% of eligible refinance amounts and operating expenses
  • EDC Finance receives an annual authorization of refinance dollars, but may seek a waiver for ‘good cause’ projects above the annual authorization amount

Terms

  • Market interest rate based on prevailing Treasury notes plus a fixed rate spread
  • 10 & 20 year fixed rate term options available
  • Loan to value up to 90% on straight refinance and up to 85% on cash out refinance

Job Requirements

Borrowers are requested to create or retain 1 full time equivalent job per $65,000 borrowed ($100,000 for manufacturers), however, EDC Finance can often utilize excess jobs in its loan portfolio to meet the required ratio if a project alone does not have enough jobs

Closing Costs

  • 0.5% participation fee based on senior loan amount (out-of-pocket)
  • 2.2% commitment and underwriting fee (debenture funded)
  • $3,000 attorney and recording costs (debenture funded)
  • Title insurance is required for real estate transactions
where To Apply
Lancaster
phone 717-397-4046
email Randy Johnston
email Lyle Hosler
Adams
phone 717-334-0042
email Kaycee Kemper
Cumberland
phone 717-240-7197
email Laura Potthoff
York
phone 717-848-4000
email Kenetha Hansen
Refi Training & Examples