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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
Nov 2017
The bonds that funded November's 20-year Small Business Administration (SBA) 504 loans priced at the third lowest of the year, keeping the resulting effective interest rate (the all-in cost to a borrower) firmly under 5%. Additionally, new lower program fees for 504 loans approved in FY 2018 are in play.
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 2.79%, resulting in a final effective interest rate of 4.51% for November for standard 504 loans (compared to 4.56% in October and 4.37% in September). The 20-year effective interest rate for debt refinance loans is 4.55% for October.
The effective interest rate for 10-year standard 504 loans(which is set bimonthly) is 4.38% for November/December. The 10-year effective interest rate for debt refinance loans is 4.44% for November/December.
For FY 2018, programfeespaid on Small Business Administration (SBA) 504 loanshave decreased. The changes are applicable only forloans approved on or after Oct. 1, 2017, through Sept. 30, 2018 (not those that are funded after Oct. 1; see Official Monthly 504 Interest Rates).
Frank Keane, fiscal and selling agent for 504 funding securities, commented following the November bond sale:
“That debenture sale was very well received and allowed the program to tighten its pricing spread to the ten-year Treasury to +45nps, its tightest spread since February, and lowered its month-over-month debenture rate by 6bps, even though Treasury rates were unchanged. Another contributing factor in the pricing was the continued flattening of the Treasury curve, as measured by the changed yield spread between two and ten-year Treasuries.
“Since the 504 program's October 5 debenture sale that spread tightened from 85 bps to 70 bps, meaning two-year Treasury yields increased 15bps while ten-year yields were unchanged. A move like that reflects market concern for additional rate hikes from the Fed (CT-2 ended the week at 1.66%, a new nine-year high), like the one that is expected at the conclusion of the December 12-13 meeting. The ongoing Effective Rate for 20-year small business borrowers declined to …4 bps lower than its 12-month average, and just 33 bps above the Prime Rate,” Keane said.
The SBA 504 Loan Program provides up to 90% financing at below-market, fixed interest rates and long amortization terms for the purchase of major fixed assets, such as owner-occupied commercial real estate and/or 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 isno limiton overall project dollar size.
For more information about SBA 504 loans in Florida, South Alabama or South Georgia,contact a Florida First Capital Loan Officer or email us atinfo@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.