# 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.

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Last checked: 2026-11-08

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.

## Sources

- [13 CFR § 120.882](https://www.ecfr.gov/current/title-13/section-120.882)
- [SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.10, Permissible Debt Refinance without Expansion (Para. C begins p. 226)](https://legacy.sba.gov/sites/default/files/2026-10/SOP%2050%2010%208.1%20Technical%20Policy%20Updates%20effective%20%2010.1.2026.docx)
- [sba.gov/sba-lenders, read November 8, 2026](https://www.sba.gov/sba-lenders)