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SBA 504 Refinance vs. Conventional Refinance in Florida
A 504 refinance can cover up to 90% of your Florida property's appraised value, fix the rate on the SBA portion for up to 25 years, and include cash for eligible business expenses. A conventional refinance has one lender and one approval, and works for investment property.
How the Two Refinance Options Compare for Florida Owners
| Feature | SBA 504 Refinance | Conventional Refinance |
|---|---|---|
| Maximum financing | Up to 90% of the property's appraised value, split between a bank loan and a 504 loan of no more than 40% | Set by the lender |
| Interest rate | SBA portion fixed for the full term. Bank portion at market rates. | Fixed or variable. Fixed periods are often shorter than the loan's amortization. |
| Term and balloon | SBA portion fully amortizes over 10, 20, or 25 years with no balloon | Set by the lender. Balloon terms are common on commercial loans. |
| Cash out | Allowed for eligible business expenses: operating expenses and other debt secured by the same property | Set by the lender |
| Property type | Owner-occupied: your business must occupy at least 51% of an existing building | Owner-occupied or investment property |
| Business requirements | For-profit, operating at least 2 years, tangible net worth under $20 million, average net income under $6.5 million after taxes | Set by the lender |
| Debt that qualifies | A commercial loan at least 6 months old, with 75% or more used for fixed assets like land, buildings, or equipment | Set by the lender |
| Payment history | Current on all loan payments for the last 12 months | Set by the lender |
| Payment test | The new payment on the refinanced debt must be lower than the current payment, including prepayment penalties and financing costs | No SBA test |
| Fees | SBA fees financed into the loan, plus a supplemental annual guarantee fee for refinancing | Origination and closing fees set by the lender |
| Prepayment | Declining penalty on the SBA portion during the first half of the term | Varies by lender |
| Approval | Bank approves its portion. FBDC packages the 504 portion for SBA approval. | Bank approval only |
Requirements shown are for a 504 refinance without expansion. Conventional terms vary by lender. Program rules are set by the SBA and can change.
Sources: 13 CFR 120.882, SBA 504 loans (SBA.gov), and FBDC 504 Refinance Program.
Could Your Florida Property Qualify, and for How Much?
Check the basics, then enter your property's value and loan balance to estimate the maximum 504 refinance.
Estimate only, before fees and closing costs. Funds above your payoff can go only to eligible business expenses and must be approved by the SBA. The final amount depends on the appraisal and underwriting.
Get Your Real NumbersYour Equity Counts Toward the 10%
A 504 refinance is sized on the property's current appraised value, not what you paid. The bank's loan must be at least as large as the 504 loan, and your contribution is typically the equity you already have in the property.
504 Refinance Structure
When Each Refinance Makes More Sense
The deciding factors are who occupies the property, how your current loan is structured, and whether you need cash for the business.
A 504 refinance usually wins when
- Your current loan has a balloon or rate reset coming
- You want a fixed rate on part of the debt for up to 25 years
- Your property has gained value and you need cash for eligible business expenses
- You're refinancing an existing 7(a) loan, or both parts of an existing 504
- You want to consolidate other debt secured by the same property
A conventional refinance usually wins when
- The property is an investment or rental your business doesn't occupy
- Your business has operated less than 2 years
- The new payment on the debt wouldn't be lower than your current one
- The loan wasn't mostly used for real estate or equipment
- You want a single lender and a single approval
Send Us Your Current Loan Statement
Share your Florida property's estimated value and your current loan terms. We'll tell you whether a 504 refinance fits, how the new structure would look, and whether cash for business expenses is possible.
- Eligibility review for your loan and business
- Estimated refinance structure
- Current 504 refinance rate for your term
- No cost and no obligation
Get Started Today
Reach our team directly or send us your loan details.
504 Refinance vs. Conventional Refinance FAQs
Who qualifies for an SBA 504 refinance?
A for-profit business that has operated for at least 2 years, occupies at least 51% of the property, has a tangible net worth under $20 million and average net income under $6.5 million after taxes, and has been current on its loan payments for the last 12 months.
What debt can be refinanced with a 504?
A commercial loan that is at least 6 months old, is secured by fixed assets, and was at least 75% used for fixed assets such as land, buildings, or equipment. Existing 7(a) loans can be refinanced, and an existing 504 can be refinanced if both the bank loan and the 504 loan are refinanced or the bank loan has been paid off.
How much can I borrow with a 504 refinance?
Up to 90% of the property's current appraised value. The 504 loan can be no more than 40% of the value, and the bank's loan must be at least as large as the 504 loan. Your contribution is typically the equity you already have in the property.
Can I take cash out with a 504 refinance?
Yes, for eligible business expenses. These include operating expenses like salaries, rent, utilities, and inventory that are unpaid or due within 18 months, and other debt secured by the same property. The funds can't be used for personal expenses, and the SBA must approve them.
Does my new payment have to be lower?
Yes. The portion of the new payment that covers the refinanced debt must be lower than your current payment, with prepayment penalties and financing costs included in the calculation. Payments tied to cash for business expenses aren't part of that test. The SBA can approve exceptions for good cause.
Can I refinance a loan held by the same bank?
Yes, but refinancing debt held by the participating bank or FBDC requires direct SBA approval rather than approval under the CDC's delegated authority, which can add time.
Does my business need to create jobs to refinance with a 504?
No. If the refinance doesn't meet a job creation or other economic development goal, the 504 loan is capped at $90,000 per employee. For example, 20 full-time employees would allow a 504 loan of up to $1,800,000.
How long does a 504 refinance take?
Most FBDC 504 loans close within 60 to 90 days of starting the process. A 504 refinance must also be disbursed within 9 months of SBA approval. If a balloon payment is approaching, start early. See our process for each step.
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FBDC is a private, non-profit Certified Development Company established in 1989 to administer the Small Business Administration (SBA) 504 Loan Program. In addition to the 504 Loan Program, FBDC is active in the economic development in the community in which it serves.