What if the debt being refinanced includes some proceeds that would not be eligible for the traditional 504 program?
As long as a substantial portion (85% or more) of the original loan was used to acquire, construct or improve eligible fixed assets, it would qualify for refinancing under this program. Since a small business may have refinanced its debt over time, it is possible a small portion of the refinancing may have included a line of credit or short-term assets. The small business may include a limited amount (less than 15%) of project costs that are not fixed assets in order to refinance the existing debt. However, all the proceeds of this debt must have been used for the benefit of the business.
