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.
Newly released Section 1112 Debt Relief Program guidance for the Small Business Administration (SBA) 504 Loan Program became effective Dec. 6, 2021, giving SBA and lenders clarity as the program comes to a close.
Availability of Funds
Regular 504 and 504 Loans Involving Debt Refinancing with Expansion – Funds will be available to make the Section 1112 payments for regular 504 loans and 504 loans involving debt refinancing with expansion that were approved on or before Sept. 7, 2021. The SBA will begin to make the payments for the 3-month period that is authorized for these loans only after the loan is fully disbursed and the loan is otherwise eligible to receive the payments. With the funds for new regular 504 loans or 504 loans involving debt refinancing with expansion exhausted on Sept. 7, 2021, no new regular 504 loans or 504 loans involving debt refinancing with expansion could be approved beginning on Sept. 8, 2021 through Sept. 30, 2021.
504 Loans Involving Debt Refinancing without Expansion – Funds will be available to make the Section 1112 payments for 504 loans involving debt refinancing without expansion that were approved on or before September 30, 2021. SBA will begin to make the payments for the 3-month period that is authorized for these loans only after the loan is fully disbursed and the loan is otherwise eligible to receive the payments.
Newly Eligible First Round Loans
For a 504 loan approved on or before Sept. 27, 2020, that was not fully disbursed on or before Sept. 27, 2020, and was, or will be, fully disbursed on or after Sept. 28, 2020, funds will be available to make the Section 1112 payments for the 3-month period that is authorized for these loans and the SBA will begin to make the payments only after the loan is fully disbursed and the loan is otherwise eligible to receive the payments. For loans that were approved and fully disbursed on or before Sept. 27, 2020, funds will continue to be available to make the Section 1112 payments for the 6-month period authorized under the original CARES Act. The SBA emphasizes that for all loans eligible for Section 1112 payments, the agency will begin to make the payments only when the loan is fully disbursed and the loan is otherwise eligible to receive the payments.
Second Round Section 1112 Payments
For any 504 loan that has not yet received any or all of the second round section 1112 payments, funds will be available to make the second round section 1112 payments for the authorized number of months when the loan becomes eligible to receive these payments.
No Loan Increases
For any 504 loan that was approved on or before Sept. 30, 2021, the SBA will not approve any request for an increase to the 504 loan on or after Oct. 1, 2021. In addition, for a 504 project that was approved beginning on Dec. 27, 2020, and ending on Sept. 30, 2021, the SBA will not approve any request for an increase to the third party loan on or after Oct. 1, 2021.
See SBA Procedural Notice: 5000-823852 for full details.
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 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.
