Record Low Interest Rate Of 4.86%

The interest rate for SBA 504 loans has dropped to a point that has never been seen before in the history of the program. The rate for a 20-year loan fell to a record low of 4.86%.This means a real opportunity for small businesses to obtain long-term money.

For a standard 504 loan, the SBA works through their lending partners – Certified Development Companies – to provide financing for up to 40% of a project with a cap of $1.5 million. A private lender provides a first mortgage for 50% of the project costs and the small business borrower completes the deal by paying 10% down. The current low, fixed interest rate coupled with a low down payment, makes this an exceptional vehicle for obtaining a commercial real estate loan. That’s the good news.

The bad news is that the clock is running out on getting SBA 504 loans with no borrower fees. The economic stimulus funding that is temporarily eliminating the borrower fee for SBA loans will likely run out by November or December.