In some cases, a loan assumption may be more advantageous than prepaying a 504 loan. Assumption of a loan may be a way of transferring a better interest rate than current market rates and there are no prepayment premiums. SBA 504 may be assumed by a new borrower provided: The value of the collateral is maintained at the same level as available to the SBA prior to the assumption The third-party lender must concur with the assumption In most cases the existing guarantors may be required to remain on the loan up to 12 months after assumption A 1% assumption fee plus normal closing costs will be charged