June 2019
Commercial Lending
25-Year Term Option for SBA 504 Loans Reaches $1 Billion Milestone

Since its launch last July, the 25-year term option for Small Business Administration (SBA) 504 loans hit a milestone of over $1 billion in fundings this month.

SBA 504 Loan Program 25-Year Term Option Reaches $1 Billion MilestoneSpread over the longer term, small business borrowers in June took advantage of the lowest ever 25-year full-term effective interest rate of 4.09% (Prime -140 bps).  Over the course of the last year, the 25-year effective rate was approximately 4.96% on average, or just 9 basis points above the 20-year fixed rate.

The 25-year option, in addition to 10- and 20-year terms, reflects a face value of $1.04 billion in total lending dollars to date.  The lending program marked its first funding in July of 2018 and in its final month of the first-year launch, June 2019 figures indicate a total of 1,289 fixed rate 504 loans to small businesses throughout the country.

See also Historical First: SBA 504 Loan Interest Rate Hits All-Time Low

The SBA 504 Loan Program provides up to 90% financing at below-Prime, fixed interest rates and long amortization terms up to 25 years for the purchase of major fixed assets, such as owner-occupied commercial real estate, energy efficient “green” initiatives and/or fixed heavy duty machinery and equipment.

504 loans are paired with private-sector commercial loans and provide up to $5 million of aggregate SBA eligibility on standard 504 projects; up to $5.5 million per 504 energy efficient green project not exceed $16.5 million in the aggregate; and up to $5.5 million per eligible small manufacturing project with no limit on total SBA dollars available.  These are SBA 2nd mortgage loan portions only; there is no limit on overall project dollar size.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@FloridaFirst.com.  Phone: 850.681.3601 or toll-free at 800.504.LOAN.