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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.
Sep 2005
While the low fixed rate is one of the most appealing features of the 504 Loan Program, understanding the Effective Rate which measures it can be a challenge.
Steve Van Order, the fiscal agent responsible for managing the purchase and sale of 504 debentures recalls, “In the winter of 2001, one of the first things I did before interviewing for the Fiscal Agent position was to try to understand the various interest rates in the 504 program. I searched out a debenture rate and various fees for a given offering, easily finding the data on the National Association of Development Companies (NADCO) website. I simply added the debenture rate plus the CDC fee plus the CSA fee plus the borrower fee and, voila, I figured I had calculated my first effective rate - what I guessed was a rate similar to a loan APR or all-in rate. But was I wrong! The rate I calculated was below the reported effective rate.”
He reports there are three key points to remember in understanding the table and the stated effective rates as published on the NADCO Website:
For more information on current or past effective rates, please visit the NADCO website at: www.nadco.org