July 2019
Commercial Lending
SBA 504 Loan Interest Rates Continue to Make History

We’ve all heard call to action sayings like, There’s Never Been a Better Time!, Act Fast Before It’s Too Late! and Don’t Miss Out!.  In the case of current Small Business Administration (SBA) 504 loan interest rates, that could not be truer.  And those rates are fixed – no ARMs ever.

Historically Low SBA 504 Interest RatesJuly’s debenture rates for the SBA 504 Loan Program continued to reflect the change in Fed policy, producing impressive ongoing effective cost of funds to small business borrowers.

Last month, for the first time since inception of the program some 33+ years ago, the 20-year rate fell below 4%.  This month, the 20-year rate remained below 4%, the 10-year rate followed suit and the 25-year rate is right on the edge.

The 20-year rate for standard 504 loans that funded in July was fixed at 3.91% (-159 basis points below Prime) and 3.94% for refinance loans.  The 25-year rate for standard 504 loans is 4.01% (-149 basis points below Prime) and 4.04% for refinance loans.  The 10-year rate for standard 504 loans for July/August (set bimonthly) is 3.93% (-157 basis points below Prime) and 3.97% for refinance loans.  WOW!

The SBA 504 Loan Program provides up to 90% financing at below-market, fixed interest rates (no ARMs) and long amortization terms up to 25 years (no balloons) for the purchase of major fixed assets, such as owner-occupied commercial real estate, energy efficient “green” initiatives and heavy duty machinery and equipment and refinancing of conventional real estate loans and other business debt.

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.

Understanding the 504 Loan Interest Rate

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.