November 2019
Commercial Lending
November 2019 SBA 504 Loan Interest Rate Report: Still Under 4%

The fixed effective interest rates for Small Business Administration (SBA) 504 loans saw another slight increase this month over last, ending a long consecutive run of declining rates, including the lowest ever in the program’s history.

SBA 504 Loan Interest Rate ReportEven with the recent increases, 504 interest rates are still under 4% and continue to offer a prime opportunity for borrowers to fix their loans at phenomenally low costs for purchases of commercial real estate and/or heavy duty machinery and equipment.

Small business owners can also climb out from under high interest commercial mortgage debt with a 504 refinance loan, under 4% as well with a cash-out option!

The November 25-year fixed interest rate for standard 504 loans is 3.740%* and 3.742%* for refinance loans.

The 20-year fixed interest rate for standard 504 loans is 3.679%* and 3.681%* for refinance loans.

The 10-year rate for standard 504 loans for November/December (set bimonthly) is 3.852%* and 3.855%* for refinance loans.

Understanding the 504 Loan Interest Rate

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.

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 to 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.  Loan amounts are SBA 2nd mortgage loan portions only with no limit on overall project dollar size.

*Includes reduced fee structure for FY 2020: For standard 504 loans, the servicing fee (paid annually) was reduced from 0.368% (36.8 basis points) to 0.3205% (32.05 basis points) of the outstanding balance of the loan.  For 504 refinance loans, the servicing fee (paid annually) was reduced from 0.395% (39.5 basis points) to 0.322% (32.2 basis points) of the outstanding balance of the loan.

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.