SBA 504 Loans Hit Record Low Interest Rate for February

    TALLAHASSEE.--(BUSINESS WIRE)--The Small Business Administration's (SBA) 504 loan program is providing stable, long-term, fixed rate financing for commercial real estate and the purchase of other capital fixed assets at the lowest interest rate since the program's inception.
    The debenture bonds that funded this month’s 20-year 504 loans were sold to investors at an interest rate of 2.63%, falling below the previous record of 2.76% set in October of 2011.     The official interest rates for 20-year 504 loans should be published by Feb. 14. It is expected the low rate for the debenture bond sales this month will result in an estimated effective interest rate for small business borrowers – including servicing fees – of only 4.70% for 20-year standard loans and 4.91% for 20-year refinance loans. The official 10-year 504 interest rates (which are published bimonthly and were set last month) are only 3.81% for standard loans and 4.34% for refinance loans. Both the 20- and 10-year SBA rates are fixed for the term of the loan and require as little as a 10% borrower down payment.
     SBA 504 loans are paired with private-sector commercial loans, providing up to $5 million of small business financing for standard projects and up to $5.5 million for green initiative and small manufacturer projects (SBA loan portions only; there is no limit on overall project size).
Proceeds from 504 loans may be used for the purchase or refinance of owner-occupied commercial real estate, heavy duty machinery and equipment and other capital fixed assets that have a useful life span of at least 10 years.

    “There is no better deal available today to small business owners looking to purchase commercial real estate, expand existing facilities or upgrade heavy duty equipment,” said Todd Kocourek, president & CEO of Florida First Capital Finance Corporation. “I urge any business owner who is seeking financing for capital fixed assets to take a strong look at the 504 loan program.”