13 CFR 120.923

§ 120.923 Policies on subordination.

United States · 13 CFR — Business Credit and Assistance · Status: effective

Cite this

Citation: 13 CFR 120.923, § 120.923 Policies on subordination, United States, version 1 as recorded 2026-07-09, yourstate.us, https://yourstate.us/provision/52255
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Full text

(a) Financing provided by the seller of Project Property must be subordinate to the 504 loan. SBA may waive the subordination requirement if the property is classified as “other real estate owned” by a national bank or other Federally regulated lender and SBA considers the property to be of sufficient value to support the 504 loan. (b) A Borrower is eligible for a 504 loan even if part of the Project financing is tax-exempt. SBA's lien position must not be subordinate to loans made from the proceeds of the tax-exempt obligation. (c) The Borrower must not prepay any Project financing subordinate to the 504 loan without SBA's prior written consent.

Legislative history

This is a federal regulation, adopted through agency rulemaking under the Administrative Procedure Act — not enacted by a recorded vote of Congress.