If you’ve been watching the SBA loan space, you may have heard about major updates to the SBA 504 refinance program made in late 2024.
The good news?
These updates remain fully in effect under the latest SBA Standard Operating Procedure (SOP 50 10 8), which went live on June 1, 2025.
Why It Matters
Business owners now have more flexibility than ever to refinance existing debt, free up cash flow, and access working capital without having to expand or take on new projects.
Here’s What Changed—and Still Applies:
1. Full Refinance Without Expansion (No More 50% Cap)
Previously, only 50% of existing debt could be refinanced unless you were expanding your business. That cap is now gone—businesses can refinance up to 100% without expansion.
2. 90% Loan-to-Value + No Cap on Eligible Business Expenses (EBE)
The maximum loan-to-value is now 90%, and the old 20% limit on EBEs (like salaries, rent, utilities, or inventory) is gone. Borrowers can use the refinance to stabilize operations—not just repay lenders.
3. 75% Rule for Debt Used Toward Eligible Fixed Assets
To qualify for a refinance with expansion, 75% of the existing loan must have originally been used for real estate, construction, or equipment—down from the previous 85% requirement.
4. Government Debt Can Be Refi’d Without the 10% “Substantial Benefit” Rule
Previously, if you were refinancing a government-guaranteed loan (like a 7(a)), you had to show at least a 10% reduction in monthly payments. That’s no longer required.
5. “Other Secured Debt” Now Eligible
Debts secured by the same collateral (such as equipment or vehicles) as the 504 loan can now be included as Eligible Business Expenses, broadening refinance options.
Confirmed in the June 2025 SOP
These changes were originally made effective November 15, 2024—and have now been officially codified into SBA SOP 50 10 8, which governs all SBA lending as of June 1, 2025. You can move forward with confidence knowing these rules are here to stay.
Who Should Consider This?
Business owners with:
- High-interest CRE or equipment loans
- Balloon payments coming due
- Prior 7(a) or USDA loans that are now costly
- Need for working capital tied up in high fixed costs
If you or a client are thinking about refinancing, this is a great time to explore options. You can get pre-qualified directly from my site and I’ll guide you (and your co-broker, if applicable) through the process.
👉 Click here to start the SBA 504 refinance prequal
Let’s put these rule changes to work for your business.
Leave a Comment