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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.
Feb 2009
The $787 billion American Recovery and Reinvestment Act of 2009 is now law. The good news for the 504 loan program is the Act contains several enhancements that will boost the program's appeal for lenders and borrowers alike.
Following is a summary of the changes contained in the final bill, H.R. 1. It contains small business sections from the two bills that were initially passed by the Senate and the House.
CDCs, such as Florida First Capital, will have their servicing fees reimbursed by the SBA.
Another major change is to allow refinancing of existing government guaranteed debt, including 504 loans. Permissible debt financing includes:
(A) Any 504 project "may include a limited amount of debt refinancing."
(B) If the project involves expansion of the small business, an amount not to exceed 50% of the project cost may be refinanced, if:
H.R. 1 does not exclude government guaranteed debt from indebtedness that may be refinanced, thus making 504 loans and 7(a) loans eligible for refinancing.
This is a permanent addition to the Small Business Investment Act.
From here, the next step is for policy-makers at the SBA to develop the regulatory changes that will be required to fully implement the provisions of this new law. The exact timeline isn't known as of this writing but as soon as it becomes available we will forward the information to our lending partners.
Under the SBA's new Energy Efficiency Public Policy Goals, small businesses that go green may now qualify for up to $4 million on the SBA/FFCFC (second mortgage) portion of their 504 loan.
There is still no limit on the amount of the bank's first mortgage loan, and therefore no maximum project size. FFCFC 504 loans can be used for the purchase, renovation or construction of owner-occupied commercial real estate.
For projects generating renewable energy, it does not need to be the business's primary business activity, just a method of meeting its own energy needs (for example, installing solar panels).
For more information on Florida First Capital and its 504 loan program, visit www.ffcfc.com, email us at insider@ffcfc.com or call 888.320.5504.
Click here for a regionalized listing of FFCFC Business Development Officers.