SBA Loan Programs for Real Estate Refinance in Tenn NOW!

The Ultimate Guide to SBA Loan Programs for Commercial Real Estate Refinance in Tennessee (2025)

SBA Loan Programs for Real Estate Refinance in Tennessee: For commercial real estate owners across the Volunteer State, from the bustling streets of Nashville to the scenic vistas of the Great Smoky Mountains, your property is more than just a building; it’s the cornerstone of your business and a significant financial asset. However, being tied to a commercial mortgage with unfavorable terms, a high-interest rate, or an impending balloon payment can stifle growth and strain your cash flow.

What if you could lower your monthly payments, unlock trapped equity to fuel expansion, and secure a stable, long-term financial future for your business?

This is where refinancing your commercial real estate debt with a government-backed loan from the U.S. Small Business Administration (SBA) becomes a game-changing strategy. These programs are specifically designed to support business owners like you, offering favorable terms that are often unattainable through conventional lending.

This comprehensive guide will walk you through the specifics of the top SBA loan programs for commercial real estate refinance. We will explore the powerful SBA 504 and SBA 7(a) loan programs, break down their current rates and requirements for 2025, and provide Tennessee-specific resources to help you make an informed decision.

Navigating the SBA landscape can seem complex, but with an experienced lending partner, the path to financial flexibility is clear. Here at GHC Funding, we specialize in helping Tennessee businesses leverage these powerful government-backed programs. We are your dedicated partner in securing the best possible terms for your commercial real estate refinance.

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Why Refinance Your Tennessee Commercial Real Estate? The Strategic Advantages

Before diving into the “how,” let’s explore the “why.” Market conditions fluctuate, and a loan that made sense five or ten years ago may now be costing you dearly. Tennessee’s dynamic economy presents unique opportunities for growth, but you need the capital and cash flow to seize them. Refinancing your commercial mortgage can be one of the most strategic financial moves you make.

Here are the primary benefits for Tennessee business owners:

• Secure a Lower, Fixed Interest Rate: Many conventional commercial loans come with variable rates that can rise unexpectedly, making budgeting a nightmare. Refinancing into an SBA loan can allow you to lock in a low, fixed interest rate for up to 25 years. This predictability provides peace of mind and can save you hundreds of thousands of dollars over the life of the loan.
• Reduce Your Monthly Mortgage Payments: By securing a lower interest rate and potentially extending the repayment term, you can significantly decrease your monthly mortgage obligation. This frees up critical cash flow that can be reinvested into your business—whether that means hiring more staff in Knoxville, purchasing new equipment for your Memphis manufacturing plant, or expanding your marketing efforts in Chattanooga.
• Unlock Trapped Equity with a Cash-Out Refinance: Has your commercial property in the Nashville metro area appreciated in value? An SBA cash-out refinance allows you to tap into that equity. You can refinance the existing loan for a higher amount and receive the difference in cash. This capital can be used for a wide range of business purposes, including:
  • Renovating or expanding your current facility
  • Purchasing inventory or equipment
  • Paying off high-interest business debt
  • Funding day-to-day operational expenses
• Avoid an Upcoming Balloon Payment: Many commercial real estate loans are structured with a large balloon payment due at the end of the term. This can create a significant financial crisis if you’re unprepared. Refinancing with a fully amortized SBA loan eliminates this risk entirely, spreading the principal and interest payments evenly over the full term of the loan.

Understanding the SBA’s Role: Your Partner in Lending

A common misconception is that the SBA lends money directly to businesses. In reality, the SBA provides a guaranty on the loan, which is issued by an approved lending institution like a bank or a specialized commercial lender. This government guarantee reduces the risk for the lender, making them more willing to offer favorable terms, such as lower down payments, longer repayment periods, and more flexible qualification criteria, than they would on a conventional loan.

This partnership structure is why choosing the right lender is paramount. An experienced, SBA-savvy lender understands the nuances of the application and underwriting process, ensuring a smoother and faster path to closing.

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Deep Dive: The SBA 504 Loan Program for Refinancing

The SBA 504 loan program is the gold standard for financing major fixed assets, including the purchase or refinance of commercial real estate. Its primary mission is to foster business growth and create jobs, making it a powerful tool for community-focused Tennessee entrepreneurs.

The 504 refinance loan has a unique structure involving two lenders:

1. A Third-Party Lender (like GHC Funding): This lender provides a conventional loan for at least 50% of the property’s appraised value, holding the first lien position.
2. A Certified Development Company (CDC): A CDC is a nonprofit organization certified by the SBA to promote economic development in its community. The CDC provides a loan for up to 40% of the property’s value, which is 100% guaranteed by the SBA. This loan holds the second lien position.
3. Your Equity: You, the business owner, must contribute at least 10% equity. The good news is that for a refinance, your existing property equity often satisfies this requirement.

SBA 504 Refinance Requirements in Tennessee

To qualify for an SBA 504 refinance, your business and the existing debt must meet specific criteria:

• Owner-Occupancy: Your business must occupy at least 51% of the commercial property being refinanced.
• Business Size and Type: You must operate as a for-profit business in the U.S. and meet the SBA’s size standards, which generally include having a tangible net worth of less than $15 million and an average net income of less than $5 million after federal taxes for the preceding two years.
• Qualified Debt: The debt being refinanced must be at least two years old and must have been originally used to acquire an SBA 504-eligible fixed asset (like your building). The original loan must also be in good standing.
• Job Creation or Public Policy Goals: While the job creation requirements are more flexible for refinance loans than for purchase loans, the program still aims to support businesses that contribute to the local economy.

SBA 504 Refinance Rates and Fees (2025)

One of the most attractive features of the 504 program is its fixed interest rate. The rate on the CDC/SBA portion of the loan is tied to the sale of 10- and 20-year U.S. Treasury bonds, making it remarkably low and stable.

While the rate for the first mortgage from the private lender will vary, the blended rate between the two loans is typically well below market rates for conventional financing.

As of early 2025, effective interest rates for the SBA portion of 504 loans are hovering in the 6.0% to 7.0% range, fixed for the term.

Loan Term	Estimated SBA Fixed Rate (2025)
25-Year	~6.4%
20-Year	~6.5%
10-Year	~6.2%

Note: These are estimates. Rates are set monthly and are subject to change. Contact GHC Funding for a precise quote.

Unlock Your Equity: The SBA 504 Cash-Out Refinance

The SBA 504 program also allows for a cash-out refinance option. Under this structure, you can refinance up to 85% of your property’s appraised value. Of this, up to 20% of the appraised value can be used for “eligible business expenses,” which includes working capital, inventory, payroll, and other operational needs. This can be a lifeline for a Tennessee business looking to scale without taking on separate, higher-interest debt.

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Deep Dive: The SBA 7(a) Loan Program for Refinancing

The SBA 7(a) loan is the SBA’s most popular and flexible loan program. While it can be used for a wide variety of business purposes, it is also a powerful tool for refinancing commercial real estate debt, especially when the situation doesn’t fit neatly into the 504 program’s box.

With a 7(a) loan, you work with a single lender, like GHC Funding, who processes the entire loan. The SBA provides a guarantee of up to 85% on loans up to 0,000 and 75% on loans greater than 0,000.

SBA 7(a) Refinance Requirements in Tennessee

The eligibility for a 7(a) refinance is generally broader than for the 504 program:

• Business Size: You must meet the SBA’s size standards for your specific industry.
• Creditworthiness: You must have a solid credit history and demonstrate the ability to repay the loan from your business’s cash flow.
• Need for Credit: You must show that you cannot obtain similar financing on reasonable terms from a conventional, non-government-guaranteed source.
• Unreasonable Terms: To refinance existing debt, you must prove that the current loan’s terms are “unreasonable.” This is often easy to demonstrate if you have a high-interest rate, a looming balloon payment, or a short maturity date.

SBA 7(a) Refinance Rates and Terms (2025)

SBA 7(a) loans typically have variable interest rates, though some lenders may offer fixed-rate options. The rate is calculated by taking a base rate (usually the Wall Street Journal Prime Rate) and adding a “spread” determined by the lender. The SBA sets maximum allowable spreads.

• Current Prime Rate (as of early 2025): Approximately 8.5%
• Maximum Allowable Spreads:
  • Loans over $50,000: Prime + up to 4.75%
  • Loans of $25,000 to $50,000: Prime + up to 6.0%
  • Loans of $25,000 or less: Prime + up to 6.5%

The maximum loan amount for a 7(a) loan is $5 million, and repayment terms for real estate refinance can extend up to 25 years.

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SBA 504 vs. SBA 7(a): Which is Right for Your Tennessee Property?

Choosing between these two excellent programs depends on your specific financial situation and goals.

Feature	SBA 504 Loan	SBA 7(a) Loan
Interest Rate	Fixed (on the SBA portion), resulting in a low blended rate.	Typically variable (Prime + spread).
Loan Structure	Two loans (Lender + CDC).	One loan (from a single lender).
Equity/Down Payment	Typically 10% (often met by existing equity).	Can be as low as 10%, but varies.
Use of Proceeds	Primarily for fixed assets (real estate, equipment). Cash-out is for business operating expenses.	Highly flexible; can be used for working capital, debt consolidation, real estate, etc.
Best For…	Business owners seeking the lowest possible long-term, fixed rate for a straightforward real estate refinance.	Business owners who need to refinance real estate and other business debts together, or who need more flexibility in the use of funds.

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Why Choose GHC Funding for Your SBA Refinance in Tennessee?

The SBA loan process can have many moving parts. Partnering with a lender that possesses deep expertise in these specific programs and an intimate understanding of the Tennessee business landscape is crucial for success. That’s where GHC Funding excels.

We aren’t just a lender; we are your strategic financial partner. We understand the unique challenges and opportunities facing business owners in Memphis, Nashville, Knoxville, and across the state.

• Deep SBA Expertise: We live and breathe SBA loans. Our team has a proven track record of guiding Tennessee businesses through the complexities of both the 504 and 7(a) programs, from initial eligibility checks to a successful closing. We know what the SBA looks for and how to present your application for the best chance of swift approval.
• Local Market Knowledge: We understand the nuances of Tennessee’s commercial real estate market. This local expertise allows us to provide realistic valuations and structure a loan that makes sense for your specific location and industry.
• A Simplified, Guided Process: You have a business to run. Our mission is to make the refinancing process as seamless and transparent as possible. We’ll walk you through every document and every decision, ensuring you feel confident and informed at every step.
• Dedicated to Your Success: Your success is our success. We are committed to finding the loan that not only solves your immediate refinancing needs but also positions your business for long-term growth and prosperity.

Contact GHC Funding today for a free, no-obligation consultation to discuss your commercial real estate refinancing goals.

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Your SBA Refinance Application Checklist

Being prepared is the first step toward a smooth application process. While your lender will provide a detailed list, here are the common documents you’ll need to gather:

• SBA Loan Application Form(s)
• Personal History and Financial Statements for all principals (20% or more ownership)
• Business Financial Statements (Profit & Loss statements, Balance Sheets) for the last three years
• Business Tax Returns for the last three years
• Personal Federal Tax Returns for all principals for the last three years
• A complete list of business debts and a loan schedule
• Business lease agreements (if applicable)
• Details of the existing property loan to be refinanced
• Business formation documents (Articles of Incorporation, Operating Agreement, etc.)

Helpful External Resources for Tennessee Investors

• SBA Tennessee District Office: The official source for SBA information, events, and counseling in Tennessee. A must-visit resource for any small business owner. (https://www.sba.gov/district/tennessee)
• Tennessee Department of Economic and Community Development (TNECD): Provides valuable resources, data, and support for businesses looking to grow within the state. (https://tnecd.com/)
• Launch Tennessee (LaunchTN): A public-private partnership that supports entrepreneurs and the startup ecosystem across Tennessee, offering mentorship and resources. (https://launchtn.org/)
• Tennessee Small Business Development Centers (TSBDC): Offers free and confidential business counseling and training to help small businesses succeed. They have offices located throughout the state. (https://www.tsbdc.org/)

Take the Next Step Towards Financial Freedom

Refinancing your commercial real estate is a significant decision, but it doesn’t have to be an overwhelming one. With the support of the SBA and the guidance of an expert lender, you can unlock the full potential of your property and set your Tennessee business on a firm financial foundation for years to come. Lower your payments, stabilize your future with a fixed rate, and access the capital you need to grow.

Ready to explore how an SBA refinance can transform your business?

Visit us at ghcfunding.com or call us today to start the conversation.

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Disclaimer: The information provided in this blog post is for informational purposes only and does not constitute financial¹ advice. Interest rates and loan terms are subject to change and are dependent on the applicant’s creditworthiness and the specifics of the loan. Please consult with a financial professional to discuss your individual circumstances.