SBA 504 Refinance Rules in California for Business Now

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Published: December 22, 2025
Categories: blog
Reading Time: 3 minutes read
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Contributing Author & Editorial Review

This article was crafted and reviewed by experienced professionals to ensure accuracy and practical insight.

GHC Funding

GHC Funding

Contributing Author

Jordan focuses on real estate finance, small business capital, and practical investing strategies for growth-minded entrepreneurs.

Taylor Morgan

Taylor Morgan

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Taylor reviews content for clarity, compliance, and real-world relevance to ensure every article meets professional standards.

Content is provided for educational purposes and does not constitute legal, tax, or financial advice. Please consult your own advisors before making decisions.

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Understanding SBA 504 Refinance Rules in California: A Guide for Business Owners

Meet Sarah, a small business owner in San Diego, California. She runs a successful organic grocery store, but her commercial property loan is weighing heavily on her finances. Sarah’s situation is common among California entrepreneurs who seek more manageable financial solutions. That’s where the SBA 504 refinance program comes into play.

In this article...

What is SBA 504 Refinance?

The SBA 504 refinance program provides small business owners with an opportunity to refinance existing debt tied to commercial real estate. This program can significantly lower monthly payments, freeing up cash flow for other business needs. It’s tailored for those who own property and want to take advantage of lower interest rates.

  • Refinance existing debt
  • Lock in lower interest rates
  • Improve cash flow

Why California Businesses Benefit

California’s dynamic market conditions, particularly in cities like Los Angeles, San Francisco, and San Diego, make refinancing an attractive option. High property values and competitive markets can strain resources. The SBA 504 refinance program offers a lifeline by reducing financial burdens and supporting growth.

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SBA 7(a) Loan

Best for: Owner-occupied commercial real estate
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RatePrime + spread
Loan amounts$350K – $5M+
TermUp to 25 years
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  • Lower down payments vs banks
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Bridge Loan

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SBA 504 Loan

Best for: Large CRE acquisitions & refinancing
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  • Low fixed rates through CDC portion
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For example, a business in San Jose can leverage the program to manage rising property costs effectively.

Key Requirements and Approval Process

To qualify, businesses generally need a credit score of 680 or higher. The approval process typically takes 60 to 90 days. It’s crucial to prepare thoroughly to avoid delays.

Common mistakes to avoid:

  • Not having up-to-date financial statements
  • Underestimating the importance of credit scores
  • Failing to demonstrate business stability
  • Overlooking potential penalties on existing loans

Real Case Study: A Success Story

Consider Mike’s tech startup in Oakland, California. Facing high interest rates on his commercial loan, Mike turned to the SBA 504 refinance program. With a property value of $1.5 million and a refinance amount of $1 million, he managed to reduce his monthly payments by 20%, allowing him to invest in new technology and staff.

Frequently Asked Questions

Here are some common questions California business owners have:

  • What types of debt can be refinanced? – Primarily commercial real estate loans.
  • Can I refinance more than one property? – Yes, if they meet eligibility criteria.
  • What are the interest rates like? – Rates are competitive and fixed.
  • Are there any fees involved? – Yes, but they are generally lower than traditional refinancing.
  • How does refinancing affect my credit? – It can improve your credit by lowering debt.
  • Is there a prepayment penalty? – Typically, no, but always check specific loan terms.

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  • Working capital + business acquisition
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SBA 504 Loan
⭐ 4.9/5
  • Owner-occupied CRE
  • Low fixed rates | 25-year terms
  • Great for business expansion
  • Refinance available
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Bank / CRE Loan
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  • Best for stabilized properties
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  • 12–25 year terms
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Compare Loan Types

Find the Right Financing for Your Real Estate or Business Project

Loan Type Best For Rates Terms Highlights Apply
DSCR Loan Rental properties (LTR & STR) 5.99%+ 30-year fixed, IO options No income docs, fast approvals, great for investors Check My Rate
Construction Loan Ground-up, fix & build, major renovations 8%–12% depending on scope 12–24 months interest-only Flexible draws, great for builders & developers Get a Quote
SBA Loan Business acquisition, working capital, CRE Prime + spread 10–25 years Lowest down payments, long terms, best for business growth See My Options

Ready to Take the Next Step?

At GHC Funding, we specialize in helping California businesses like yours navigate the SBA 504 refinance process. Contact us today to explore your options and secure a brighter financial future for your business.

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