Refinancing an SBA Loan

  find me a REFI lender

Refinancing a loan can often lead to better interest rates and payment terms. For bus with SBA loans, understanding the refinancing process is crucial. This article expands on some common questions regarding refinancing SBA loans.


Can You Refinance an SBA Loan?

Yes, you can refinance an SBA loan, but not with another SBA loan. Refinancing is an option available to businesses looking to improve their loan conditions, such as obtaining a lower interest rate or extending the loan term. However, the refinancing loan must come from a non-SBA source.


Why Can’t You Refinance an SBA Loan with Another SBA Loan?

The SBA does not allow a business to refinance an existing SBA loan with another SBA loan. This policy is in place to prevent the stacking of government-backed loans, which could increase risk and over-leverage a business financially. Instead, businesses must seek alternative financing sources if they wish to refinance their existing SBA loan.


Can You Have Multiple SBA Loans?

Yes, having multiple SBA loans is permissible under SBA rules. A business can have more than one SBA loan, provided they meet the eligibility criteria for each loan and demonstrate the ability to repay all the loans. This flexibility is beneficial for businesses that require additional funding for various projects or operational needs.


Can refinancing an SBA loan save on interest expense?

Yes, you can refinance your SBA loan to potentially save on loan interest, but it’s important to note that most SBA loans have variable interest rates. This means that the interest rate on your loan fluctuates based on market conditions. Consequently, if interest rates in the market fall, as anticipated, the interest on your SBA loan will automatically adjust downwards, reducing the amount of interest you pay without the need for refinancing. However, if you’re seeking more stable and predictable payments or if market rates don’t align with your expectations, exploring refinancing options with a fixed-rate loan from a non-SBA lender could be beneficial. In general, traditional commercial loans have lower interest rates and shorter loan terms — typically three to seven years, but are harder to qualify than an SBA loan, which is backed by an SBA guarantee for the SBA lender.


Can I refi my non-SBA loan, i.e., a traditional commercial loan, with an SBA loan?

Yes, you can refinance your non-SBA loan, such as a traditional commercial loan, with an SBA loan. Many borrowers opt for this refinancing route primarily to lower their overall monthly payments. This is achievable because SBA loans typically offer longer repayment terms—up to 10 years for most business loans and up to 25 years for real estate loans. These extended terms can significantly reduce the monthly payment amount, making it more manageable for the borrower. However, it’s important to note that the interest rate for an SBA loan is generally higher compared to traditional commercial loans for borrowers with good credit. Therefore, while refinancing with an SBA loan can offer the advantage of lower monthly payments due to the longer term, it might come at the cost of a higher interest rate overall. Borrowers should carefully consider their financial situation and priorities, perhaps with the advice of a financial advisor, to determine if this refinancing option aligns with their long-term financial goals.



Refinancing an SBA loan presents a unique set of opportunities and challenges for businesses. As we have explored, while it is not possible to refinance an SBA loan with another SBA loan, alternative financing options can be pursued. These alternatives could lead to more favorable terms, such as lower interest rates or extended repayment periods. Additionally, the ability to have multiple SBA loans allows for greater flexibility in funding various business needs.

For those with variable-rate SBA loans, market trends could naturally decrease interest rates, potentially making refinancing unnecessary. However, businesses seeking more predictability in payments, or facing different market conditions, might consider refinancing with a fixed-rate, non-SBA loan. On the other hand, refinancing a non-SBA loan with an SBA loan could be advantageous for lowering monthly payments due to the SBA’s longer loan terms, though this might come with higher interest rates.

Ultimately, the decision to refinance an SBA loan should be made after a thorough analysis of the business’s financial situation, market conditions, and long-term objectives. Consulting with financial advisors and preferred SBA lenders is advisable to navigate this complex process and make a decision that aligns with the company’s strategic financial goals. Reach out to us to be connected with an SBA lender(s) who can answer all of your refi questions by clicking on the Find me a Lender button.


  find me a REFI lender