{meta_title}

SBA 504 Interest Rates Update: September 2021

Sep 2021

Small Business Administration (SBA) 504 loan fixed interest rates for September saw another increase for a second consecutive month, pushing most of the rates into the high 2s and bordering the 3s. Frank Keane, fiscal agent for SBA 504 program funding securities, comments on the incredible popularity of the program.

Even with the bump in rates, 504 loans continue to deliver a favorable and affordable opportunity for small business owners to purchase commercial real estate and start building equity or refinance burdensome high-interest conventional mortgage debt with a cash-out option.

• The September 25-year effective fixed interest rate for standard 504 loans is 2.977% and 3.019% for refinance loans.
• The September 20-year effective fixed interest rate for standard 504 loans is 2.860% and 2.903% for refinance loans.
• The 10-year effective fixed interest rate for standard 504 loans is 2.687% and 2.739% for refinance loans (set bimonthly).

Frank Keane, fiscal agent for SBA 504 program funding securities, commented following the September bond sale:

“Rates remain range bound, producer prices stay high, and the SBA 504 loan program sees issuance surge higher with the second largest sale in program history. At $635,138,000, the September sale trails only the year ago sale of $1.3 billion that represented the culmination of P&I forgiveness as directed by Section 1112 of the Cares Act and was 56% greater than the 12-month average of $406,268,000.

“Prospects for increased issuance are high as loan approvals through July 31 are 44% higher than a year ago and the program recently reached its authorization cap of $7.5 billion for Fiscal Year 2021 (for regular 504 loans only). Halting approvals (for regular 504 loans) for the rest of this month may cause some disruption for the size of coming sales, but between already approved loans and the expansion of Debt Refinance the 504 program is poised for growth,” Keane said.

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.

For more information about SBA 504 loans in Alabama, Florida or Georgia, contact a Florida First Capital Loan Officer or email us at info@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.