Until not so long ago, there were many obstacles to refinancing your SBA commercial loan. However, a recent change to the SBA refinance rules gives business owners a unique opportunity to take advantage of historically low, fixed rates. Keep reading to learn more.
New SBA Refinance Rules
When it comes to refinancing, it’s not uncommon to see 7(a) loans used to refinance 504 loans. However, the opposite wasn’t allowed by SBA rules.
Things changed a couple of months ago with a new rule geared toward helping small businesses hit financially by the COVID-19 pandemic.
As a result, since last August, you can refinance 7(a) loans into 504 loans. In the next section, we’ll see why this small change can make a big difference by helping you save thousands of dollars.
What It Means for You
The changes outlined above are big news because 504 loans offer low fixed rates. 7(a) loan rates, on the other hand, are often variable and range between 5% and 6%.
Now, if you consider that the going rate (November 2021) on a 25-year 504 loan is 2.92% fixed, it’s easy to see how the new rules are a unique opportunity for small business owners.
This difference (5%-6% against 2.92%) means that you can potentially save thousands of dollars on interest.
The Bottom Line
To summarize, some of the benefits of opting for 504 refinance include:
- Historically low rates
- Longer terms
- Change from variable to fixed rate
- Improve the financial standing of your business
As with any refinance, there are some requirements to keep in mind. For example, applicants must be in operation for at least two years, and the debt to be refinanced must be at least six months old.
If you are interested in refinancing your SBA commercial loan, contact Gellyfish Commercial today to evaluate your eligibility or to learn more about our full range of financing options.
Gellyfish: Certainty of Execution in SBA Loans
Looking to refinance your SBA loan? Gellyfish is here to help. We offer financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (firstname.lastname@example.org), telephone (877-800-4493), social media (Facebook, Twitter, LinkedIn), or through the live chat on our home page to schedule a free consultation.