SBA 504 Loan Interest Rates
Official monthly SBA 504 effective interest rate tables can be found at Eagle Compliance LLC. 25- and 20-year term loans fund every month; 10-year term loans fund every other month. Effective interest rates are inclusive of servicing fees, which are subject to credit risk of the applicant.
TALLAHASSEE, Fla. (March 15, 2012) —This is the kind of news we don't mind repeating -- interest rates for Small Business Administration (SBA) 504 loans continued an unparalleled drop to new record low levels this month.
The debenture bonds that funded this month's 20-year 504 loans were sold to investors at an interest rate of 2.51%, falling below last month's previous record of 2.63%. This resulted in a March effective interest rate - with servicing fees added - of 4.59% fixed for 20-year standard loans and 4.79% fixed for 20-year refinance loans.
The 10-year 504 debenture bonds, which are sold bi-monthly, were sold at an interest rate of 1.31%, which eclipsed the previous record of 1.52% in November 2011. This resulted in a March/April effective interest rate - with servicing fees added - of 3.82% fixed for 10-year standard loans and 4.07% fixed for 10-year refinance loans.
This is continued great news for small business owners looking to grow and expand their operations. With up to 90% financing and amortization terms to 20 years, fixed interest rates this low make the 504 loan program the very best deal going for the purchase or refinance of owner-occupied commercial real estate, heavy duty machinery and equipment and other capital fixed assets.
The 504 program is an equally great loan product for commercial lenders. Many financial institutions are under scrutiny from both their boards and investors/shareholders to retain favorable positions and lower lending risks.
The 504 is a natural fit in this regard. Under the program's unique distributed credit structure, our commercial lending partners get a 50% loan-to-value first lien position on the assets being purchased -- cutting its risk in half. Florida First Capital provides SBA-backed financing up to 40% of the project cost and takes a second lien position, and the borrower provides a 10% down payment in most cases. No other loan program offers this type of risk security to a lending partner.
SBA 504 loans provide up to $5 million of small business financing for standard projects and up to $5.5 million for green initiative and small manufacturer projects (SBA loan portions only; there is no limit on overall project size).
So how long will these great rates last? That's hard to say but what is for sure is there's never has been a better time to participate in the 504 loan program and small business borrowers should take advantage of these unprecedented low rates while they last.
Florida First Capital Finance Corporation is a non-profit certified development company that promotes economic development and job creation throughout Florida by working with the SBA and private-sector lenders to provide available and affordable financing to small businesses. Florida First Capital lends under the SBA 504 loan program as well as the Florida Recycling Loan Program and other small business assistance programs.
For more information, contact Florida First Capital at 888-320-5504, email info@ffcfc.com or visit www.ffcfc.com.
