- Loan Programs
- Lending News
- Our Story
- Contact Us
SBA 504 Loan Interest Rates
May 2022
25-Year Fixed Rate Standard:
5.119%
25-Year Fixed Rate Refinance:
5.133%
20-Year Fixed Rate Standard:
5.061%
20-Year Fixed Rate Refinance:
5.075%
10-Year Fixed Rate Standard:
4.931%
10-Year Fixed Rate Refinance:
4.948%
Full-term fixed interest rates shown; includes all servicing fees
Aug 2014
The effective interest rate for 20-year Small Business Administration (SBA) 504 loans that funded in August held steady and remained below the 5% mark for a second straight month. The last time the 20-year rate was this low was over a year ago.
The debenture bonds that funded this month's 20-year 504 loans were sold to investors at 2.88%, resulting in a final effective interest rate of 4.96% (compared to 4.95% in July and 5.06% in June). Year to date, the 20-year rate has averaged 5.17%.
The effective interest rate for 10-year 504 loans (which is done bimonthly and was set last month) is 4.51% for July/August (compared to 4.50% for May/June and 4.48% for March/April). Year to date, the 10-year rate has averaged 4.54%.
Both the 20- and 10-year SBA 504 interest rates are fixed for the term of the loan and require as little as a 10% borrower down payment.
504 loans are funded by the sale of debentures (or bonds) which are pooled and sold on Wall Street each month. The effective interest rate - the rate borrowers pay - is comprised of the debenture rate (which is pegged to an increment above the current market rate for U.S. Treasury issues), the note rate and ongoing carrying costs of the program as set by the SBA.
Frank Keane, fiscal agent for Development Company Finance LLC - the entity responsible for marketing and selling 504 funding securities - commented following the August debenture sale:
“The Trend Continues - continues to be the header for these comments as the bond market is moving sideways. Even a better than expected 2Q14 GDP report of +4.0% couldn't shake participants from focusing on weak, deflationary European growth and geo-political risks that now include Iraq along with Ukraine, Gaza and Syria.
“Since peaking at 3.62% for our September 2013 debentures, we have seen rates decline 0.74 bps, with many analysts still predicting higher rates, though with less conviction. Fed speakers have cautioned about some markets ‘appearing to be stretched' and the European Central Bank is offering banks funding at low rates in hopes of encouraging lending.
As low as U.S. Treasury rates appear, the 10-year note is still cheap compared to German bonds, currently trading at 1.10% and there is still string global demand for assets amid the confusion,” Keane commented.
For small business owners looking to expand and modernize their operations through the purchase of major fixed assets, the SBA 504 Loan Program offered through Florida First Capital provides up to 90% below-market, fixed interest rate financing with repayment terms up to 20 years for the purchase of commercial property and/or fixed heavy duty machinery and equipment.
504 loans are paired with private-sector commercial loans, providing up to $5 million of small business financing for standard and public policy projects and up to $5.5 million per green initiative and small manufacturer projects (these are SBA 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 Officer hereor email us atinfo@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.