SBA may subordinate the SBA 504 loan to a new third-party lender if the refinancing is on more favorable terms for the borrower and the borrower does not receive any funds from the refinancing (no cash-out), except for reasonable closing costs of refinancing. The term of the new third-party loan must equal or exceed the term of the original third-party loan. The SBA may also subordinate to a larger new third party loan if the loan proceeds will be used to improve the project collateral and the SBA’s collateral position remains the same or is improved by the transaction.