SBA 7(a) loans are great vehicles for financing the acquisitions of the hotels specially for challenging transactions and when time is of essence. However, most hoteliers refinance out of SBA 7(a) loans once prepay period of 3 years is reached. In this project, the client was trying to free up the SBA allocation (albeit in the near future the SBA will remove the $5 million allocation limit for borrowers under the 50% ownership in the small business) and to cash out specially at the time when there is expectation of Covid shutdown. Scientific Capital refinanced the SBA 7(a) loan with a $3.2 million conventional 25-year fully amortized loan at 80% Loan to Value, 5% fixed rate for 5 years, and prepay of 3 2 1. This project refinance provided the borrower with $600K of cash-out to be applied to any other investment or business expense at borrower’s discretion