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SBA 504 Refinance Rules in Maryland

As a business owner in Maryland, you understand the importance of smart financial decisions for the success and growth of your company. However, sometimes unexpected expenses or economic conditions can make it difficult to manage your finances effectively. That’s where the Small Business Administration’s (SBA) 504 Refinance program comes in. This program provides a valuable refinancing option for small businesses in Maryland, offering lower interest rates and longer repayment terms. Let’s dive into the details of SBA 504 Refinance rules in Maryland and how it can benefit your business.

A Real Maryland Business Owner Story

Meet Jane, the owner of a small manufacturing company in Baltimore, Maryland. Her business was thriving until the recent economic downturn due to the pandemic. With a decrease in demand and an increase in operational costs, Jane’s company was struggling to make ends meet. She had taken out a loan a few years ago to purchase her business property and was now struggling to make the monthly payments. Jane was worried that she might have to shut down her business if she couldn’t find a solution. That’s when she heard about the SBA 504 Refinance program from a fellow business owner. With the help of GHC Funding, Jane was able to refinance her existing loan and save her business from financial turmoil.

What is SBA 504 Refinance?

The SBA 504 Refinance program is a loan offered by the Small Business Administration to refinance existing debt on commercial real estate properties. This program is specifically designed for small businesses that are facing financial difficulties and are struggling to make loan payments. The refinanced loan is used to pay off the existing debt, resulting in lower interest rates and longer repayment terms, providing much-needed relief for small businesses.

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Who Needs SBA 504 Refinance?

If you are a small business owner in Maryland with a commercial property loan, and you are finding it challenging to make your monthly payments, then you may benefit from the SBA 504 Refinance program. This program is suitable for businesses that have been in operation for at least two years and have a credit score of 680 or above. It is also a great option for businesses looking to free up cash flow or take advantage of lower interest rates to expand their operations.

Why Maryland Businesses Benefit from SBA 504 Refinance

Maryland is a state with a thriving business community, but the high cost of living and doing business can make it challenging to manage finances. The SBA 504 Refinance program offers lower interest rates compared to traditional bank loans, making it a more affordable option for small businesses. Additionally, the program allows for longer repayment terms of up to 25 years, providing businesses with more flexibility in managing their cash flow. The refinanced loan can also be used to consolidate debt, freeing up funds for business growth and expansion.

Credit Score Requirements

As mentioned earlier, the SBA 504 Refinance program requires a credit score of 680 or above for approval. This credit score requirement may vary depending on the lender, but it is generally lower compared to traditional loans, making it a great option for businesses with less-than-perfect credit. This program also takes into account the overall financial strength of the business, including cash flow and profitability, making it a more accessible option for small businesses.

How Long Does Approval Take?

The approval process for SBA 504 Refinance loans can take anywhere from 30-60 days, depending on the lender and the complexity of the loan. The process involves submitting financial documents and completing an application, which will then be reviewed by the lender and the SBA. It is essential to work with a reputable and experienced lender, like GHC Funding, to ensure a smooth and timely approval process.

3 Common Mistakes Maryland Business Owners Make

When it comes to SBA 504 Refinance, there are a few common mistakes that Maryland business owners should avoid:

• Not researching and comparing lenders: It is crucial to work with a lender who has experience in SBA 504 Refinance loans and can offer competitive rates and terms.
• Not having all the necessary documents: It is essential to have all the required financial documents ready before applying for an SBA 504 Refinance loan. This includes tax returns, financial statements, and property documents.
• Not understanding the terms and conditions: As with any loan, it is vital to read and understand all the terms and conditions before signing any documents. Working with a trusted lender can help you navigate through the process and ensure that you fully understand the terms.

A Real Case Study: Maryland Business in Baltimore

John owns a small retail store in Baltimore, Maryland. Due to the pandemic, his business was struggling, and he was unable to make the monthly payments on his commercial property loan. He had a credit score of 700, but the high-interest rates were eating into his profits. John approached GHC Funding for an SBA 504 Refinance loan, and he was able to refinance his existing loan at a lower interest rate of 3.5% and a longer repayment term of 20 years. This saved John over $1,500 every month, providing much-needed relief for his struggling business.

Frequently Asked Questions

Here are some common questions that Maryland business owners have about SBA 504 Refinance:

• Can I use the refinanced loan for other purposes?
  No, the SBA 504 Refinance program can only be used to refinance existing debt on commercial real estate properties.
• Is the refinanced loan guaranteed by the SBA?
  Yes, the SBA guarantees up to 90% of the loan for lenders, making it a less risky option for lenders.
• Can I refinance a loan that is not an SBA loan?
  No, the SBA 504 Refinance program is only available for refinancing existing SBA loans.
• How soon can I refinance my existing SBA loan?
  There is no set timeline for refinancing an existing SBA loan. However, it is recommended to wait at least two years before considering refinancing to establish a good payment history and improve credit score.
• Do I need to have collateral for SBA 504 Refinance?
  Yes, the refinanced loan will be secured by the commercial property being refinanced.

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Ready to Refinance with GHC Funding

If you are a business owner in Maryland facing financial difficulties and struggling to make loan payments, then the SBA 504 Refinance program may be the solution for you. At GHC Funding, we have years of experience in helping businesses secure SBA loans, including the SBA 504 Refinance. Our team of experts will guide you through the process and help you find the best terms and rates for your business. Contact us today to learn more and see if you qualify for an SBA 504 Refinance loan.

Don’t let financial challenges hold your business back. Take advantage of the SBA 504 Refinance program and give your business the opportunity to thrive. Contact GHC Funding today for more information and get one step closer to financial stability for your Maryland business.

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