Throughout this website, we talk about why the SmartChoice® Commercial Loan (aka the SBA 504 loan) is the smartest financing option for small business owners who want to own their commercial real estate (instead of leasing). These loans provide up to 90% loan-to-cost financing and have below-market, long-term fixed interest rates. For small business owners, this means lower down payments, lower monthly payments and less interest expense than what ordinary commercial loans offer.

We have Great News for small business owners: It’s now possible to refinance commercial real estate with an SBA 504 loan via the SBA 504 Loan Refinancing Program. This was established when the Small Business Jobs and Credit Act was passed in September 2010, and is significant for a number of reasons, not least of which is that refinancing proceeds can be used for working capital.

This recent change happened on October 12, 2011, and made it possible to use 504 loan refinancing proceeds for itemized business expenses such as salaries, rent, utilities, inventory, paying-down payables, and other obligations of a small business (working capital, essentially). It goes without saying that this is a very big deal. Small business owners can now tap the embedded equity in their commercial real estate and essentially do a “cash-out” refinance with a 504 loan. This may just be the shot-in-the-arm America’s small businesses needs to keep on being successful.
This is just one important aspect of the SBA 504 Loan Refinance Program — there are lots of others. You can read more about the benefits, and also the eligibility requirements, at www.SBA504LoanRefi.com (our website that’s dedicated to providing the most accurate and useful information about this new refinance program).