fixed vs. variable rate

If you do have both options on the table I believe fixed is much easier to manage. The first couple of years of a transition is crucial and adding one more item out of your control is likely not worth it. Many of my buyers are having to right size wages to keep/attract talent and sink money into one time technology upgrades right away, so having one other expense that could go up and decrease cash flow could be risky. So far I have only had one person take me up on variable pricing, when both options were on the table. We portfolio our loans so pricing options are based on the risk profile of the transaction/buyers, which does add some flexibility if needed.

Hi Trip, on most floating rate SBA loans the guarantee portion of the loan is sold to a 3rd party. So refinancing the loan would require you to pay off the loan completely. Refinancing a 7a loan with another 7a loan is very difficult. Additionally to do so you would need to pay the guarantee fee again which would likely negate the interest savings. There is an ability to adjust the rate on a fixed rate 7A loan but it would be unlikely that a bank would commit to do that at the time of closing. Overall this is a very difficult thing to do