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SBA 504 Loan Interest Rates

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September 2022

25-Year Fixed Rate Standard:
5.440%

25-Year Fixed Rate Refinance:
5.454%

20-Year Fixed Rate Standard:
5.343%

20-Year Fixed Rate Refinance:
5.357%

10-Year Fixed Rate Standard:
5.332%

10-Year Fixed Rate Refinance:
5.349%

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.

 

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Small Business Lending News

SBA Issues Guidance on Temporary Refinancing of 1st Mortgage Loans on 504 Projects

Mar 2021

The Small Business Administration (SBA) has released guidance temporarily authorizing Certified Development Companies (CDCs) to allow refinancing of the 1st mortgage lender loan on an existing 504 project in an amount that, when combined with the outstanding balance on the subordinate 504 loan, is not more than 90% of the total loan to value (LTV).

This temporary guidance is in effect now until Dec. 27, 2021, and any loan that refinances the 1st mortgage loan of an existing 504 project under this temporary authority must be closed and funded no later than Dec. 26, 2021.

  • The lender who refinances the 1st mortgage lender loan may be the existing lender or a different private lender.
  • The borrower may use the “cash out” from the refinancing to support its business operating expenses. The “cash out” cannot be used for personal expenses.
  • The lender loan on an existing SBA 504 project may be refinanced only once under this temporary provision.
  • The CDC must set out the terms of the subordination in a properly executed subordination agreement.

The following conditions set forth in SOP 50 55 related to the subordination of the 504 loan to the new lender loan continue to apply:

  • The 1st mortgage lender loan should be seasoned;
  • The borrower should have a satisfactory credit history;
  • An analysis of the borrower servicing request must include the reason for the subordination and a description of how the new money will be used;
  • The borrower must demonstrate the ability to repay all of the obligations on the full amount of the outstanding loan after the proposed subordination;
  • The subordination must be limited to a specific amount and not extend to future advances; and
  • The subordination may not otherwise adversely affect the priority of the lien securing the 504 loan.

See SBA Procedural Notice 5000-20099 for complete details.

For more information about the temporary refinancing of third party loans on existing 504 projects 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.

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