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.
The Small Business Administration (SBA) has announced the temporary elimination of certain 504 loan fees in accordance with Section 327(b) of the Economic Aid Act enacted in December.
The act eliminates the 0.5% Third Party Lender Participation Fee on loans in senior lien positions in 504 projects and the 1.5% Certified Development Company (CDC) Processing Fee in debenture pricing for all loans approved from the date of enactment of the act (Dec. 27, 2020) and ending on Sept. 30, 2021.
Note: Both fees are eliminated only to the extent the cost of such elimination in fees is offset by appropriations and, consequently, the fees will be eliminated only for so long as appropriations remain available. The SBA will provide updated guidance on the availability of appropriations for the elimination of these 504 loan fees as necessary.
CDCs are not permitted to cancel 504 loans approved prior to Dec. 27, 2020, and resubmit them in order for the loan to qualify for these temporary fee waivers. Borrowers that have already paid any portion of the 1.5% CDC Processing Fee for a 504 loan that was approved on or after Dec. 27, 2020, will be reimbursed.
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 South 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.
