I Forgot All About This!

Karen Schimpf Cedar Park Tx Screenshot 2024 03 11 At 11.07.04 am

I Forgot All About This!

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I attended an SBA conference last week and one of the classes talked about SBA 504 refinancing. I had forgotten all about that! I have been so busy with purchases and expansions that I forgot about the 504 refinance- BUT IF YOU OWN YOUR BUSINESS AND OWN THE PROPERTY YOUR BUSINESS IS IN, THIS COULD BE A HUGE VICTORY FOR YOU-ESPECIALLY IF YOU HAVE AN ADJUSTABLE SBA 7A LOAN. Let me give an example….
The building you own is worth $2 Million and you owe $1.2 Million. You have a prime plus 2.5% interest rate (11%) on an SBA 7A loan, your payment is $11,761. Assuming it qualifies for refinancing, (we will determine when you call), you could get a FIXED blended SBA rate of about 7% which would save you OVER $3200 a MONTH. IF you run 10% margins, that is like making an extra $32,000 a month! BUT YOU CAN JUICE THIS EVEN MORE BY BORROWING FOR ELIGIBLE BUSINESS EXPENSES or (EBE). You can go up to 85% with cash out for EBE. The EBE can not exceed 20% of the appraised value so in this example, $400,000 cash out (20% of $2 Million value) but you can use that for operating expenses you have currently or are coming up in the next 18 months including salaries, rent, utilities, business lines of credit AND business credit card debt.
If you do this, the loan would be $1.6 Million, the blended rate would be around 7% and your payment would be $11,308. THAT’S RIGHT, you could PULL $400,000 CASH OUT AND STILL LOWER YOUR PAYMENT THAT YOU ARE CURRENTLY PAYING NOW!!!! It’s like free money for your business. Now listen, if you are in strong financial shape, don’t pull out the extra money, just refinance the debt and save over $3,000 a month. But if you are a little tight, and a lot of businesses are right now, this is a way to tap your equity and possibly KEEP YOUR PAYMENT THE SAME. WOW!

To find out if refinancing is right for you, GIVE ME A CALL TODAY at 512-354-5949 or go here to start https://www.applycommercialloans.com/. We will run the numbers, see if it is eligible, let you know your savings, and discuss if it is worth doing. Just one call or e-mail and we will help you figure it out of course, a free consultation. Give me a call today!