Understanding SBA 504 Refinance Rules in California: A Guide for Business Owners
John, a small business owner in San Diego, was feeling the pressure. His commercial real estate loan was becoming a burden with high monthly payments. He needed a solution to improve cash flow and sustain his business. He found it in the SBA 504 refinance program.
What is the SBA 504 Refinance Program?
The SBA 504 refinance program allows business owners to refinance existing debt related to fixed assets such as commercial real estate and equipment. It’s designed to provide financial relief by offering lower interest rates and extended repayment terms.
For California businesses, especially in competitive markets like Los Angeles and San Francisco, this program can be a game-changer. With rising property values and high operating costs, the ability to refinance at favorable terms is crucial.
Need capital? GHC Funding offers flexible funding solutions to support your business growth or real estate projects. Discover fast, reliable financing options today!
⚡ Key Flexible Funding Options:
GHC Funding everages financing types that prioritize asset value and cash flow over lengthy financial history checks:
DSCR Rental Loan
- No tax returns required
- Qualify using rental income (DSCR-based)
- Fast closings ~3–4 weeks
SBA 7(a) Loan
- Lower down payments vs banks
- Long amortization improves cash flow
- Good if your business occupies 51%+
Bridge Loan
- Close quickly — move on opportunities
- Flexible underwriting
- Great for value-add or transitional assets
SBA 504 Loan
- Low fixed rates through CDC portion
- Great for construction, expansion, fixed assets
- Often lower down payment than bank loans
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For details on GHC Funding's specific products and to start an application, please visit our homepage:
- Lower monthly payments
- Improved cash flow
- Preservation of working capital
Eligibility and Requirements
To qualify for the SBA 504 refinance in California, your business must meet specific criteria. Your credit score should be at least 680. The loan being refinanced must be at least two years old.
The approval process generally takes around 45-60 days, depending on the complexity of the case and responsiveness to documentation requests.
Common Mistakes to Avoid
Many business owners make avoidable errors when seeking SBA 504 refinancing:
- Not preparing accurate financial statements
- Ignoring the need for a business plan update
- Overlooking credit score improvement opportunities
- Failing to consult with a financial advisor
Understanding these pitfalls can save time and increase approval chances.
Case Study: A Success Story in Sacramento
Consider Sarah’s bakery in Sacramento. She refinanced her 0,000 commercial property loan through the SBA 504 program. Her monthly payments decreased by 20%, freeing up cash to expand her product line and hire additional staff.
Sarah’s experience highlights the potential benefits for businesses across California’s diverse economic landscape.
FAQs: What California Business Owners Want to Know
Here are answers to common questions:
- What can be refinanced? Business-related debt linked to fixed assets.
- How much can I refinance? Up to 90% of the property’s value.
- Is there a prepayment penalty? Generally, yes, during the initial years.
- Can I include cash-out for business expenses? Yes, up to 20% of the loan.
- Are there fees? Yes, but they can often be rolled into the loan.
- How does it impact taxes? Interest may be tax-deductible, consult a tax advisor.
Take Action: Contact GHC Funding
Are you a California business owner looking to improve your financial situation? GHC Funding is here to help. Our expert advisors can guide you through the SBA 504 refinance process, ensuring you get the best terms for your business.
Contact us today to learn more about how we can support your financial goals.
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