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Yes, you can refinance an SBA loan in Florida. An existing SBA loan, a conventional commercial mortgage or other qualifying business debt can be refinanced into a new SBA 504 loan if the debt was used for fixed assets such as land, buildings or long-term equipment and meets the SBA’s “qualified debt” test. Since the SBA’s rule change took effect on November 15, 2024, the path is wider than it used to be: the old minimum payment-savings test is gone, and a refinance can reach up to 90% of the value of the property or equipment.
This guide explains which debt qualifies, how much you can borrow, what the process looks like with a Certified Development Company (CDC) in Florida, and what to consider if refinancing is not the right move.
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Explore SBA 504 Refinancing
FBDC specializes in SBA 504 lending for small businesses refinancing eligible real estate and long-term equipment debt.
The phrase covers three different situations, and the rules differ for each.
The SBA itself says borrowers may refinance business debt, including an existing SBA loan, using a 7(a) loan. The 504 program is the other major route, and it is where the 2024 changes matter most. Because our work at FBDC centers on 504 lending, the rest of this article focuses on that route.
A 504 project is financed in layers. A third-party lender, usually a bank, provides a first-lien loan. A CDC provides a second-lien loan that is funded through an SBA-guaranteed debenture. The borrower contributes equity, which in a refinance is often the equity already in the property.
Two features make this structure attractive for refinancing:
Only a CDC can make these loans. The SBA notes that 504 loans are available exclusively through CDCs, which are authorized to issue them and understand the program’s regulations. If you want to see how a CDC fits between the bank and the SBA, our overview of the Certified Development Company model walks through it.
The central concept is “Qualified Debt.” Under the SBA’s current regulations, qualified debt must be a commercial loan incurred at least six months before the application date, with at least 75% of the proceeds used for eligible fixed assets such as land, buildings or long-term equipment that serve as collateral.
In practice, ask four questions about the loan you want to replace:
An existing SBA loan can be qualified debt when it meets those tests. The 2024 rule specifically removed the former benefit test for refinancing other government debt, which is relevant if you are moving out of an earlier SBA-backed loan.
A refinance can also include certain eligible business expenses. These include operating costs such as rent, utilities and salaries that were incurred but not paid, or that become due within 18 months of the application, under 13 CFR 120.882. The SBA also removed the cap on eligible business expenses in the November 2024 rule. That makes a 504 refinance more flexible than a simple payoff of a mortgage.
Some costs remain off limits. The SBA’s rules list working capital, counseling or management fees, franchise fees, advertising and short-term equipment, furniture and furnishings as ineligible, subject to stated exceptions. The SBA also states that a 504 loan cannot refinance debt that does not meet the qualified-debt definition, or be used for speculation or investment in rental real estate.
That last point matters in Florida, where many owners hold buildings with tenants. A business that occupies its property and leases excess space can be a fit. A pure investment property is not. Our occupancy checklist for Florida small businesses explains how lenders look at this.
The debt is only half the test. The business must also qualify. According to the SBA, the business must be operating, for-profit, U.S.-based, small under SBA size standards and not in an ineligible category. General standards include qualified management, a feasible business plan, good character and the ability to repay.
Nonprofits, passive real estate investors and businesses looking only for working capital are not a match for 504 financing. If you are unsure where you stand, our four-check eligibility guide for Florida is a quick way to test yourself before you contact a CDC.
The loan-to-value limit is the headline change. For a refinance without expansion that includes eligible business expenses, the SBA’s rule allows the 504 and third-party loans to total up to 90% of the fair market value of the fixed assets serving as collateral.
Here is a simple illustration, using round numbers for explanation only and not a quote:
ItemExampleAppraised value of your building$2,000,000Maximum combined loans at 90%$1,800,000Existing mortgage balance to pay off$1,300,000Room for eligible business expensesUp to $500,000, if they qualify
The eligible business expenses must still fit the SBA’s definition. The room under the cap is not free cash for any purpose, and working capital remains ineligible. How a refinance with and without expansion differs, and when the 504 can be used to pull out equity for eligible costs, is covered in our article on cash out versus rate and term under the November rule. If you are also planning to add square footage or buy new equipment, see the six steps for a 504 refinance with expansion.
No. Before the 2024 amendments, a borrower had to show a minimum benefit from refinancing. The SBA’s direct final rule eliminated the 10% substantial benefit test for refinancing with expansion and for refinancing without expansion when the debt is other government debt. The SBA also confirms that borrowers are not required to demonstrate a minimum reduction in their loan payment to qualify for 504 refinancing.
That is a regulatory change, not a reason to refinance. The SBA’s stated aim was to lower costs by streamlining access to debt refinancing for small businesses. Whether it lowers your costs depends on your numbers.
People often ask about a “2% rule” for refinancing. That is a common lender rule of thumb, not an SBA 504 requirement, and we are not aware of an SBA regulation by that name. The practical question is simpler: how long does it take for monthly savings, or the value of a longer fixed term, to repay the closing costs? Gather these figures:
Divide the total refinance costs by the monthly savings. If the answer is a few years or less, the refinance usually deserves a serious look. If the new structure mainly gives you a fixed rate and a 20 or 25 year term, count the value of that predictability too.
The process runs through a CDC, which can also explain how the first-lien lender fits in. The SBA tells borrowers to use Lender Match or contact a local SBA District office or a CDC, and notes that a CDC can make 504 loans statewide.
Timelines vary with the complexity of the file. Our guide to closing a 504 loan in Florida in 60 to 90 days explains what keeps a file moving and what slows it down.
We have worked in SBA 504 lending for more than 35 years, and the most common mistake we see on refinance inquiries is starting with the rate instead of the debt. A business owner calls asking what a 504 rate looks like today. The better first question is whether the existing loan is qualified debt. If 75% of the proceeds went to the building, the file usually has a path. If the loan was mostly working capital, no rate will fix that.
The second thing we see is owners treating the removal of the payment-reduction test as permission to refinance for any reason. The test is gone, but arithmetic is not. We encourage owners to compare total cost over the period they actually expect to hold the property, to account for what they pay to exit the current loan, and to decide what the longer fixed term is worth to them.
Third, the 90% limit is a ceiling, not a target. Borrowing the maximum can make sense when the business has eligible expenses to cover and cash flow to carry them. It does not make sense just because the room exists.
If you bring us the note, the closing statement and a recent balance, we can usually tell you quickly whether the path is open.
If your existing loan is on a Florida building or long-term equipment, our SBA 504 Refinance Program is the place to start. We review your existing debt, tell you whether it meets the qualified-debt test, and walk you through each step with the first-lien lender. Owners who need to move before permanent financing is ready can also look at our 504 Velocity Bridge Loan Program, and veterans can review VetLoan Advantage Plus.
For a broader look at financing paths in the state, see commercial real estate financing in Florida. If you are weighing equipment instead of property, our article on 504 equipment financing in Florida explains the 10-year useful life standard we use.
Some loans cannot be refinanced into a 504, and some owners decide they should not. These are the realistic alternatives:
If you are trying to get out of an SBA loan entirely because of financial stress, talk to your lender, your accountant and, if default is possible, a business attorney. The right move depends on what you personally guaranteed and what collateral secures the loan.
Often, yes. The 7(a) loan must meet the qualified-debt test: a commercial loan at least six months old, with at least 75% of proceeds used for eligible fixed assets that serve as collateral. A CDC reviews your original closing documents to confirm this.
No. Under the rule effective November 15, 2024, borrowers do not have to demonstrate a minimum reduction in their loan payment. You should still compare closing costs with the benefit of the new rate and term before you decide.
For a refinance without expansion that includes eligible business expenses, the 504 and third-party loans may total up to 90% of the fair market value of the collateral. The maximum 504 loan amount listed by the SBA is $5.5 million, and your actual amount depends on appraisal, debt and eligibility.
No. Working capital is an ineligible cost. A refinance can include certain eligible business expenses, such as operating costs that were incurred but unpaid or that come due within 18 months of the application.
The SBA points borrowers to Lender Match, their local SBA District office or a CDC. We are a CDC that works with Florida businesses, and you can start on our SBA 504 Refinance Program page.
