$450,000 mortgage loan
$100,000 business debt
$550,000 total debt. And his payments on that debt equal $6,127.
Today, his building has appreciated and is worth $1,000,000. The 504 Refinance allows cash out up to 25% of the value of the building for business debt and even upcoming debts for the next 18 months like unpaid payables, payroll, etc. We could refinance him and have it look like this:
$450,000 Mortgage payoff
+$100,000 business debt
+$150,000 working capital, cash for business use
$700,000 new mortgage.
This debt would be a $400,000 first and a $300,000 second from the SBA. The blended rate on the two loans would be roughly 4.6% and the blended amortization would be 23 years.