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Refinance

Refinancing With an SBA 504 Loan: The Rules, in Plain English

If you're looking at a balloon payment in the next eighteen months, this page is for you. The SBA 504 refinance program lets a business refinance eligible commercial mortgage debt at a long-term fixed rate, and in some cases take cash out for eligible business expenses. The property must be at least 51% owner-occupied and the existing debt must meet SBA seasoning requirements.

When refinancing makes sense

  • A balloon coming due on your commercial mortgage
  • A rate reset on a variable loan that's about to cost more
  • Expensive short-term debt secured by the building
  • Equity in the building that could fund eligible business expenses at a fixed rate

SBA 504 refinance rules

Owner-occupancy
The business must occupy at least 51% of the property (13 CFR 120.131(b)).
Seasoning
The debt being refinanced was incurred at least 6 months before the application and secured by eligible fixed assets for at least that long; the borrower has been current on all payments for the prior 1 year (13 CFR 120.882(g)).
Loan-to-value
Up to 90% of fair market value, raised from the previous cap in November 2024 (89 FR 79734).
Eligible debt
Commercial mortgage debt, typically secured by the same fixed assets. Certain government-guaranteed debt can qualify subject to SBA rules. Ineligible: debt already on terms as good as a 504's, and most unsecured debt.

Hedged deliberately: "typically," "subject to SBA guidelines." The rules changed in November 2024 and the SOP updates again on 1 October 2026; competitor pages quoting an 85% LTV or a 20% cash-out cap are over a year stale.

Refinance with cash-out

Within the 90% loan-to-value limit, a 504 refinance can include cash for eligible business expenses: operating costs, salaries, rent, utilities, inventory, or other expenses of the business that are certified as such. The former cap on cash-out no longer exists; the LTV limit is now the constraint. What doesn't qualify: distributions to owners, personal expenses, and investment in other real estate.

What it actually costs

One-time fees on the SBA portionroughly 3%, financed
RateFixed for 10, 20 or 25 years, set at the debenture sale. This month's rates
Prepayment on the old loanWhatever its note says; check before you start

The full fee breakdown.

The timeline

Prequalification is fast, and most NSDC loans close within 45 days. If you have a balloon date, tell us on the first call and we'll tell you honestly whether there's time.

A Nevada refinance

Las Vegas · Restaurant and entertainment

The Bootlegger Bistro

An $8,440,000 project with a $2,388,000 SBA 504 refinance through NSDC, the largest deal in the story library and a refinance rather than a purchase.

Questions

Can I refinance a loan I got last year?
If it's at least 6 months old and you've been current for 1 year on your obligations, it may qualify. Ask.
Can I refinance an existing SBA loan?
Certain government-guaranteed debt can be refinanced under SBA rules; each case is checked individually.
What if my building is only half owner-occupied?
It needs to be 51%. At exactly half, it doesn't qualify.
Does it reset my term to 25 years?
A refinance is a new 504 loan with its own term, 10, 20 or 25 years, and its own fixed rate.

Verified against 13 CFR 120.882 and 89 FR 79734 in September 2026. This page is for general informational purposes only.