April 2020
Commercial Lending
April 2020 SBA 504 Loan Interest Rates Remain at Historic Lows

The April effective fixed interest rates for Small Business Administration (SBA) 504 loans remain among the lowest in program history, with the majority of rates still under 3%.  This marks 11 consecutive months with 504 interest rates under 4% – and for the 20-year rate, that’s back-to-back months under 3%.

SBA 504 Loan Interest Rate Report  The April 25-year effective interest rate for standard 504 loans is 3.032% and 3.034% for refinance loans.

  The 20-year effective interest rate for standard 504 loans is 2.960% and 2.962% for refinance loans.

•  The 10-year effective interest rate for standard 504 loans is 2.847% and 2.849% for refinance loans (set bimonthly).

Understanding the 504 Loan Interest Rate

Frank Keane, fiscal and selling agent for SBA 504 program funding securities, commented following the April 9 bond sale:

“While the previously downtrodden stock market rallied, Treasury rates eased back still acting as a safe-haven instrument, but also aware of how much money Treasury will need to print.  After seeing spreads gap wider due to credit concerns, markets regained their equilibrium with the original Fed initiative and the TALF program’s expansion to include additional product, which helped even more.

“The relative calmness that support provided was beneficial for the 504 program’s (April) debenture sale that was well received by investors who participated in the largest monthly sale since July 2013 ($421,208,000).  At 1.64%, the 20-year issue was just 15 bps higher than in March, which set the record for the lowest term rate in history,” said Keane.

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 as well as commercial

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.