On Oct. 1, SBA issued final rule on 504 loan program debt refinancing.
SBA issued final rule amending regulations for 504 Loan Program (13 CFR Part 120).
Streamline loan application process, expand eligibility for small businesses borrowers.
Follows 2021 interim final rule, Oct. 2023 final rule on 504 Loan Program, #112475.
Rule Amendments
Removed 50% cap on debt refinance without expansion to conform with legislation.
Raised loan to value requirement on debt refinancing without expansion projects that include other business expenses to 90%, eliminated cap on eligible business expenses.
Aligned substantially all standard for 504 debt refinancing with expansion so consistent with debt refinancing without expansion standard of 75%, lowered from 85% level.
Eliminated 10% substantial benefit test on 504 debt refinancing with expansion and 504 debt refinancing without expansion on refinancing other government debt.
Also allowed certain other secured debt to be included as an eligible business expense.
Effectiveness
Direct final rule effective Nov. 15, 2024; must receive comments by Oct. 31, 2024.
If adverse comment received, SBA publish timely withdrawal of rule in federal register.
