Experience refinancing an SBA loan to Conventional?

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February 20, 2026

by a searcher from Massachusetts Institute of Technology - MIT Sloan School of Management in Jersey City, NJ, USA

Hi, I am wondering if anyone has a POV on potential to use non-SBA loan to refinance out of an SBA loan. For example, if I reach 40-50% equity and want to lift liens and PGs are there financing tools available? Thanks in advance!
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Reply by an intermediary
from University of Virginia in Metuchen, NJ 08840, USA
Anecdotally, I have heard that after 2 years of on-time payments, some lenders may be willing to consider a conventional refinance if the business qualifies. However, conventional lending often relies on collateral that may not be available and on covenants that can create additional risk, so it may be worth discussing with your lender before going external.
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Reply by a lender
from Emory University in Atlanta, GA, USA
We have done it before. You will have a hard time getting rid of collateral liens or a PG (maybe a burn down), it depends on the size and recurring nature/history of EBITDA. As mentioned, you will have more covenants, although not too dissimilar. I think the real analysis you need to consider is what source of capital gives me the flexibility to grow my business, both internally and externally, and how they react in the event of a foot fault...is it close the loan, immediately, is it default interest, or do they work with you through a temporary issue.
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