June 2020
Commercial Lending
SBA Interest Rates Continue to Make History – Small Business Wins with the 504 Program

One year ago this month, the 20-year interest rate for Small Business Administration (SBA) 504 loans fell below 4% (3.98%) and marked the new beginning of the lowest rates ever in the 34+ year history of the program.  The previous record had been set in December 2010 at 4.01%.  Then, this past March, that record was shattered when 504 rates fell below 3%.  And those rates are fixed – no ARMs ever.  They haven’t stopped falling yet, either.

SBA 504 Loan Effective Interest Rates  The June 25-year effective interest rate for standard 504 loans is 2.602% and 2.603% for refinance loans.

  The June 20-year effective interest rate for standard 504 loans is 2.528% and 2.530% for refinance loans.

  The 10-year effective interest rate for standard 504 loans is 2.654% and 2.656% for refinance loans (set bimonthly).

These rock bottom rates create a timely and affordable opportunity for small business owners to refinance conventional mortgage debt or purchase commercial real estate and start building equity.

Preserving capital is as important now as it’s ever been.  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 the refinance of commercial mortgage and other business debt with or without a cash-out option.

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.

Small business owners who are considering refinancing or purchasing commercial real estate need to act now given the current unprecedented low rate environment.  This opportunity may not come around again for years, if ever.

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.