Can SBA refinance this debt?
Short answer
Usually, if the debt has been current for 12 months and the new payment is 10% lower. Factoring cannot be refinanced. A merchant cash advance qualifies only after conversion to a term loan and 24 months of amortization (SOP 50 10 8.1, App. 14).
- payment history the debt must show
- 12 months
- minimum drop in the new payment
- 10%
- amortization after an advance converts
- 24 months
- before a seller note qualifies
- 36 months
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Your result
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Start my loan requestJanover Capital LLC is not a lender and is not the SBA. The lender makes the credit decision. A lender or marketplace may pay us a referral fee if we connect you, at no cost to you. Advertiser disclosure.
Every refinance has to pass these tests
| Test | Outcome | How the rule reads | Source |
|---|---|---|---|
| Payment history | Required | The debt must be current for at least the last 12 months or the life of the loan, whichever is less. Current means no required payment has remained unpaid more than 29 days. | SOP 50 10 8.1, App. 14, Para. A (p. 355) |
| Creditor loss | Barred | SBA-guaranteed loans may not pay a creditor in a position to sustain a loss. | SOP 50 10 8.1, App. 14, Para. A (p. 355); 13 CFR § 120.201 |
| New payment | Required | The new installment must be at least 10% less than the existing installment amounts in aggregate. Demand notes, balloon debt, credit cards, home equity lines and certain revolving lines are exempt. | SOP 50 10 8.1, App. 14, Para. A, Ten Percent Improvement to Installment Payment Amount |
| Same-lender debt | On conditions | A lender may refinance its own debt only under the conditions in Appendix 14, and may not shift a potential loss to SBA. | SOP 50 10 8.1, App. 14, Para. A.4, Refinancing Same Institution Debt |
Merchant cash advances
A merchant cash advance can be refinanced only under conditions. It must be converted to a term loan and amortize for at least 24 months, with no new agreements since. An active agreement is not eligible (SOP 50 10 8.1, App. 14, Para. A.3). SBA calls these Sales-Based Repayment Agreements. An active advance can stay in place beside a new SBA loan, but it counts against your cash flow. How an active advance affects an application.
Debt by debt
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Merchant cash advance or other sales-based agreement | Depends | A merchant cash advance can be refinanced only under conditions. It must be converted to a term loan and amortize for at least 24 months, with no new agreements since. An active agreement is not eligible. | SOP 50 10 8.1, App. 14, Para. A.3 (Para. A begins p. 355); SOP 50 10 8.1, App. 3, Definitions, Sales-Based Repayment Agreement |
| Factoring agreement | Barred | Factoring agreements are not eligible for refinancing. | SOP 50 10 8.1, App. 14, Para. A.2 (Para. A begins p. 355) |
| Debt owed to an SBIC or a New Markets Venture Capital company | Barred | A 7(a) loan may not refinance debt owed to a Small Business Investment Company or New Markets Venture Capital Company. | SOP 50 10 8.1, App. 14, Para. A (p. 355); 13 CFR § 120.130(b); 13 CFR § 120.130(b) |
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Term loan from a bank, online lender or other creditor | Not barred | A lender may refinance a non-SBA loan or other borrower debt from another lender if the new loan meets the 10% payment test. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt; SOP 50 10 8.1, App. 14, Para. A, Ten Percent Improvement to Installment Payment Amount |
| Revolving line of credit | Depends | A revolving line can be refinanced when the original lender is unwilling to renew it. It can also be refinanced to restructure for a lower rate or longer term. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt |
| Demand note or balloon debt | Not barred | Debt structured with a demand note or balloon payment can be refinanced, and the 10% payment test does not apply. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt; SOP 50 10 8.1, App. 14, Para. A, Ten Percent Improvement to Installment Payment Amount |
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Business credit card balance | Depends | Business credit card debt is eligible if the applicant certifies the proceeds were used exclusively for the business. | SOP 50 10 8.1, App. 14, Para. A.1 (p. 355) |
| Home equity line used for the business | Depends | A home equity line is eligible if the applicant certifies the amount was used exclusively for the business. | SOP 50 10 8.1, App. 14, Para. A.1 (p. 355) |
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Seller note from buying a business | Depends | A seller note can be refinanced after it has been in place and current for 36 months. | SOP 50 10 8.1, App. 14, Para. A.1 (p. 355); App. 15, Para. C.2.a |
| Other debt used to buy a business | On conditions | Debt used to finance a change of ownership of a going concern is eligible, under the Appendix 15 rules. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt; SOP 50 10 8.1, App. 15, Changes of Ownership |
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Existing SBA 7(a) loan | Depends | Proceeds may refinance existing 7(a) loans from other lenders if the Appendix 14 conditions are met. A lender's own 7(a) loan is limited. | SOP 50 10 8.1, App. 14, Para. A, Refinancing a 7(a) Loan of Another Lender |
| Existing SBA Express loan, same lender, before amortizing payments begin | Not barred | A new SBA Express loan can refinance an existing one before amortizing payments begin. The new loan can run up to 10 years with no new revolving period. | SOP 50 10 8.1, Sec. B, Ch. 2, Para. B.3 (p. 126) |
| Existing SBA 504 loan | Depends | A 7(a) loan can refinance a 504 loan only in two cases. Both the third party loan and the 504 loan are refinanced together. Or the third party loan is paid in full and the 504 is refinanced as part of a larger expansion. | SOP 50 10 8.1, App. 14, Para. A, Refinancing a 504 with a 7(a) Loan |
| Debt | Outcome | How the rule reads | Source |
|---|---|---|---|
| Vendor bills or trade payables | Not barred | The payment of trade payables is not considered debt refinancing, so these refinancing tests do not apply. | SOP 50 10 8.1, App. 14, Para. A, Other Conditions That Apply to Debt Refinancing |
| Past-due taxes | Depends | Proceeds may not pay past-due payroll, sales or similar trust taxes. Delinquent business income tax may be paid only with an approved IRS payment arrangement that is current. | 13 CFR § 120.130(e); SOP 50 10 8.1, Sec. A, Ch. 3, Para. B, Payment of Delinquent Taxes |
| Money the business owes an owner, officer or other associate | Barred | Loan proceeds may not go to payments, distributions or loans to an Associate of the applicant. Ordinary compensation and changes of ownership are the exceptions. | 13 CFR § 120.130(a); SOP 50 10 8.1, Sec. A, Ch. 3, Para. B, Restrictions on Uses of Proceeds |
| Debt owed to a broker, packager or referral agent involved in this loan | Barred | The SBA loan may not refinance a debt where the creditor is an Agent involved in the loan. | SOP 50 10 8.1, Sec. A, Ch. 4, Para. D, Agents |
| Personal debt not used for the business | Barred | Appendix 14 covers business debt, and a purpose that does not benefit the small business is not allowed. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt; 13 CFR § 120.130(f) |
| Other debt on the business's books | Depends | Debt on the business balance sheet is eligible if the business tax returns show the interest expense on it. | SOP 50 10 8.1, App. 14, Para. A.1, Types of Business Debt |
Common questions
How is the 10% payment test measured?
The new installment must be at least 10% less than the existing installment amounts in aggregate (SOP 50 10 8.1, App. 14). Debts refinanced together may be combined. If payments escalate, compare with the expected payment within the next 12 months. How the test works.
What does current mean?
A required payment has not remained unpaid for more than 29 days. The debt must be current for at least the last 12 months or the life of the loan, whichever is less (App. 14, Para. A).
Can working capital proceeds pay off debt?
No. Working capital proceeds may not refinance existing debt (SOP 50 10 8.1, Sec. A, Ch. 3, Para. A.2). The refinance has to be identified in the loan's use of proceeds. More on working capital.
Does this mean a lender will refinance my debt?
No. This check only reads your answers against SBA's written rules. A lender decides whether to make the loan.
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Cite this page: Can SBA refinance this debt?. SBA Express Loans, Janover Capital LLC (checked November 9, 2026). https://www.sbaexpress.loans/tools/can-sba-refinance-this/
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Janover Capital LLC is not a lender and is not the SBA. The lender makes the credit decision. A lender or marketplace may pay us a referral fee if we connect you, at no cost to you. Advertiser disclosure.