Lender Q&A: Refinancing a 7(a) Loan

Thursday, September 26, 2013 / Published in Featured News, Lender Q&A
Lender Q&A: Refinancing a 7(a) Loan

  

Question: Can you refinance a 7(a) loan with a 7(a) loan?
 
Answer by Tom McHale, Senior Vice President
 

 

 


"According to the SOP, refinancing an existing 7a loan has the same eligibility requirements as any other term debt, with one additional requirement. In either case, the new lender needs to demonstrate that the current debt is on unreasonable terms (i.e 10% cash flow savings, balloon payment). Additionally, if the loan to be refinanced is a 7a loan, then the existing lender must be unwilling to modify existing loan terms and the new lender's file must document the existing lender’s unwillingness."

 

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