# Can a 504 loan refinance an SBA loan or the bank's own debt?

**Short answer:** Yes, under conditions. An existing 7(a) or 504 loan needs lower payments and written notice to the current holder. Same-bank debt needs SBA's approval and the bank's certification that no potential loss shifts to SBA. Source: SOP 50 10 8.1, Sec. C, Ch. 1, Paras. C.10-C.11.

Canonical page: https://www.sbaexpress.loans/answers/sba-504-refinance-sba-loan-or-same-bank-debt/
Last checked: 2026-11-08

Yes. Both are allowed, with extra conditions on each.

## Existing SBA-guaranteed loans

- With expansion, a 7(a) loan can be refinanced in whole or in part. A 504 loan can be refinanced only in whole (SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.11; Para. C begins p. 226).
- An existing 504 loan qualifies only if the third party loan is refinanced with it or already paid in full.
- The Certified Development Company (CDC) must notify the current CDC or 7(a) lender in writing at least 10 business days ahead.
- New payments on the refinanced portion must be lower than the existing payments. Prepayment penalties and financing fees are added first.

## Same-institution debt

Same-institution debt is debt of the CDC or third party lender financing the new project, or of an affiliate. Source: 13 CFR § 120.882(e)(8).

- A CDC in the Premier Certified Lenders Program cannot use its delegated authority. SBA must approve the loan.
- The third party lender must certify it is not in a position to sustain a loss that shifts to SBA (Para. C.10; Para. C.11).
- On the no-expansion route, that third party loan cannot be sold in an SBA-guaranteed pool (13 CFR § 120.882(g)(13)).

On the no-expansion route, the third party lender must also certify it would not refinance without 504 assistance (13 CFR § 120.882(g)(14)).

## Debt that is barred

A 504 project cannot refinance debt owed to an Associate, an Small Business Investment Company (SBIC) or a New Markets Venture Capital Company (Para. C.10; Para. C.11).

## Sources

- [SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.10 (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)
- [SOP 50 10 8.1, Sec. C, Ch. 1, Para. C.11 (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)
- [13 CFR § 120.882(e), (g)](https://www.ecfr.gov/current/title-13/section-120.882)
- [13 CFR § 120.920](https://www.ecfr.gov/current/title-13/section-120.920)