Refinancing exceptions for 7a

by a searcher from University of Colorado at Boulder

1 year ago

Hello SF community - have read that 7a to 7a is tough but “If a borrower requests a loan modification but the lender cannot modify the terms, the SBA may also permit a refinance.” We are 18 months into a floating rate 10yr 7a @ P+2% and starting to sting, Fixed wasn’t an option by our lender at the time unfortunately. Anyone have experience w/ this? Hoping we can roll into P+0% new 10yr. Also consolidated biz has grown to $15mm revs - what size do you need to be to get SOFR based pricing… maybe non-recourse? Thanks in advance as always!

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searcher from University of Colorado at Boulder

Thank you all!

1 year ago | like reply | 0 likes

lender from University of Missouri - Columbia

Thanks Karen. Hi Peter, common rule is that you have to provide material savings, and the current SBA lender has to send a letter stating they will not do the proposed loan. If you can do that, you would have two material issues with refinancing (at least in my opinion with some limited information) 1. you would have to pay the SBA fee again. This would seem cost prohibitive even if monthly payments are lower 2. The bulk of SBA lenders are floating rate. There are exceptions of course but most of us float the rate. Getting to P+0% would mean there is minimal secondary market to sell the loan so getting that rate would likely be tough. Your best bet is to see if your current lender would consider an express loan for you. This won't make the payments on your loan any cheaper, but would provide you capital as a bridge and hope the rates start to come down. The only reason a lender would accommodate a loan modification is if they feel you are going to start missing payments.

1 year ago | like reply | 0 likes

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