January 2020 SBA 504 Loan Interest Rate Report
The January effective interest rates for Small Business Administration (SBA) 504 loans fixed slightly higher than last month, but still remain under 4% for an 8th consecutive month and well below the Prime Rate.
Small businesses also continue to take notice of the 25-year fixed rate term option. Since its first funding in July 2018, the number of 25-year loans has increased significantly, with the latest pool financing 275 loans amounting to more than $207,000,000 million in commercial assets financed nationally. Plus, 5 more years to pay off a commercial asset comes cheap. January’s 25-year option has a fixed interest rate that is only 0.07% higher than the 20-year rate.
• The January 25-year effective interest rate for standard 504 loans is 3.714% and 3.716% for refinance loans.
• The 20-year effective interest rate for standard 504 loans is 3.644% and 3.646% for refinance loans.
• The 10-year effective interest rate for standard 504 loans for January/February (set bimonthly) is 3.804% and 3.806% for refinance loans.
The SBA 504 Loan Program provides up to 90% financing at below-market, 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, renovations, new construction, 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.
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.