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The 504 Debt Refinancing Program is structured like the traditional 504 Loan Program:
• A first lien loan from a private-sector lender covering up to 50% of the project cost.
• A second lien loan secured from a Certified Development Company, which is backed by an SBA-guaranteed debenture, covering up to 40% of the project cost.
• Borrower contribution of at least 10%.
• Terms on second lien loan are 10, 20, or 25 years.
• Interest rates on second lien loans are fixed when the debenture funds.
• Terms for first lien loans are negotiated with the lender, but must be 10 years on a 20 and 25-year debenture and 7 years on a 10-year debenture.