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SBA 504 Loan Interest Rates

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September 2022

25-Year Fixed Rate Standard:
5.440%

25-Year Fixed Rate Refinance:
5.454%

20-Year Fixed Rate Standard:
5.343%

20-Year Fixed Rate Refinance:
5.357%

10-Year Fixed Rate Standard:
5.332%

10-Year Fixed Rate Refinance:
5.349%

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.

 

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Small Business Lending News

Rate Drop: June 2016 SBA 504 Loan Interest Rate Report

Jun 2016

The interest rate for 20-year Small Business Administration (SBA) 504 loans that funded in June fell to its bottom most point this year and remained firmly in the low 4% range. Frank Keane, fiscal and selling agent for Eagle Compliance, LLC - the entity responsible for marketing, pricing and selling 504 funding securities - says we can expect these trends to continue.

504 loans are funded by the sale of bonds (aka debentures) which are pooled and sold on Wall Street each month.

Understanding the 504 Loan Interest Rate

The bonds that funded this month's 20-year 504 loans were sold to investors at 2.18%, marking the 25th consecutive month the bond rate has remained below 3%. This resulted in a final effective interest rate (the all-in cost to a borrower) of 4.23% for June (compared to 4.32% for May).

The effective interest rate for 10-year 504 loans (which are set bimonthly) is 4.19% for May/June (down from 4.33% in March/April).

Frank Keane, fiscal and selling agent for 504 funding securities, commented following the June bond sale:

“Bonds rallied, stocks softened and the 20-year debenture rate was the lowest since May 2013. In addition to its recent cycle low debenture rate, the June sale represented the largest issue since September 2014 -- $349,640,000.

“The market trends mentioned above were more pronounced globally as Japanese, German and UK bonds hit record low yields; with 10-year German bonds ending the week (of June 6) at 0.01%, compared to U.S. Treasuries at 1.64%. This yield differential is the reason why as much as 73% of last week's 10- and 30-year Treasury auctions went to foreign investors as they seek value and liquidity.

“With the ECB and BoJ continuing their Quantitative Easing policies (sending sovereign debt to even greater negative yields), and the Fed checkmated (a rate increase) by May's extremely weak jobs report (the weakest in more than 5 years), we can expect these trends to continue,” Keane said.

The SBA 504 Loan Program provides up to 90% below-market, fixed interest rate financing with repayment terms up to 20 years for the purchase of commercial real estate and/or fixed heavy duty machinery and equipment.

504 loans are paired with private-sector commercial loans and provide up to $5 million for standard and public policy projects (aggregate limit) and up to $5.5 million per green initiative and small manufacturer projects. 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 Florida,contact a Florida First Capital Loan Officeror email us atinfo@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.

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