Can a 504 loan refinance debt without an expansion?
Short answer
Yes. Qualified Debt can be refinanced under 13 CFR 120.882(g), up to 90% loan to value on a project that refinances only Qualified Debt. The debt must be fixed-asset debt at least 6 months old (13 CFR 120.882(g)(16)). The business needs two years of operations.
Yes. Qualified Debt can be refinanced under 13 CFR 120.882(g), up to 90% loan to value on a project that refinances only Qualified Debt. Section C, Chapter 1, Paragraph C.10 of SOP 50 10 8.1 sets the conditions.
What counts as Qualified Debt
A commercial loan that:
- Was fully disbursed at least 6 months before the application
- Put 75% or more of its proceeds into Eligible Fixed Assets, with the rest benefiting the business
- Has been secured by Eligible Fixed Assets for at least 6 months
- Was for the benefit of the small business seeking the refinance
A later refinance of a qualifying original loan can also count. Federally guaranteed loans qualify only on stated conditions, including a substantial benefit.
Other requirements
- The business must have operated for all of the 2-year period ending on the application date.
- A Third Party Loan must be at least as large as the 504 loan.
- The 504 loan can supply no more than 40%, and you supply at least 10% or 15%.
- A supplemental annual guarantee fee applies (Para. C.10.j).
- Disbursement must occur within 9 months of approval, with a possible 6-month extension.
A note on SBA's lender page
SBA's lender page, read November 8, 2026, shows different terms. It lists a two-year debt age, an 85% limit with business expenses, and no refinancing of government-guaranteed loans. 13 CFR 120.882(g) and SOP 50 10 8.1 say 6 months, 90%, and guaranteed loans on stated conditions. We follow the regulation and the SOP.
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Tell us the amount you need and what it is for. We refer you to lenders that may fund businesses like yours, and it costs you nothing.
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