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 Jobs and Credit Act of 2010 (HR 5297) incorporated several key changes for the 504 loan program, including a highly sought after debt refinancing provision.
Under this temporary two-year program, businesses will be allowed to refinance qualified existing debt without expansion into long-term, fixed-rate loans through the 504 program. This means small business owners holding owner-occupied commercial real estate loans with undesirable rates will have the opportunity to refinance these loans using the 504 program.
The Small Business Administration (SBA) is currently in the process of creating regulations for the refinancing provision. As part of its rulemaking process, the SBA held an open meeting Nov. 17, 2010, in Boston, MA, to gain comments from the banking and certified development company (CDC) industries.
Mary Kropp, FFCFC Senior Vice President and Director of Loan Administration, attended the meeting along with a significant bank and CDC presence.
Prior to the meeting, much concern was expressed over the promulgation of a two-tier system, which would in effect leave the originating bank at a disadvantage via a proposed 70-20-10 refinance loan structure for them versus a 50-40-10 refinance loan structure allowed from an outside bank for the same customer.
Concern was also expressed regarding a potential limitation of refinance to loans with maturities of less than two years instead of allowing any qualified borrower with sufficient cash flow and collateral to seek refinance.
The banks that testified during the Boston meeting were overwhelmingly opposed to a two-tier system as well as a limitation on the maturities for loans otherwise eligible for potential refinance.
All in all, the banking and CDC industries are on the same page and encourage the SBA's issuance of the regulations required to commence use of the refinance program as soon as possible. According to the SBA, this should occur during the first quarter of 2011.
For more information about 504 loans in Florida, contact Florida First Capital by visiting www.ffcfc.com, emailing us at insider@ffcfc.com or calling 888.320.5504.
