• Interest Rate on SBA 504 Loans Declines to Record Low 5.25%

  • The Small Business Administration's (SBA) 504 loan program is currently providing long-term, fixed rate financing for commercial real estate at the lowest interest rate since the program's inception.  The SBA's lending partners, such as Lakeshore 504 are busy working with small business borrowers who are taking advantage of this record low interest rate to finally purchase or build their own facilities.

    NADCO, the trade association for the nation's Certified Development Companies (CDCs) reports that the interest rate for a 20-year SBA 504 loan has hit a record low for the projects funded in April 2009. This rate is the lowest it has been since the program's inception in 1986.  The April debentures that funded this month’s SBA 504 loans were sold to investors at an interest rate of 4.31%.  This low rate, coupled with the new fee reductions provided by the Congressional stimulus bill, led to an effective interest rate – including servicing fees – of only 5.25% for this month.

    Chris Crawford, NADCO President commented, "This is truly an historic opportunity for access to long term capital for small businesses right now.  The low rate that the 504 debentures sold for this month is added to the stimulus bill fee reductions and the continuation of the elimination of the SBA’s borrower fee for this year. All these factors make the interest rate for SBA 504 loan the lowest it has ever been for small business borrowers. This is an incredible rate for a 20-year, fixed rate commercial loan with as low as a 10% down payment."

    The Small Business Administration's (SBA) 504 loan program provides long-term, fixed rate financing for commercial real estate. Since its inception 504 has funded nearly $40 billion in loans to growing small businesses.   The SBA's lending partners, Certified Development Companies (CDCs) are extremely busy working with small business borrowers who are taking advantage of these record low interest rates to purchase, build or expand their own facilities.

    Added to the advantages of these low interest rates and fees, with some businesses closing their doors as a result of the recession, there are more and more commercial properties coming onto the market at very attractive prices.  If a small business has been considering investing in a building, now is a great time to act.  "NADCO was instrumental in convincing Congress to eliminate fees on SBA 504 loans as a way to provide new low cost opportunities for small businesses to invest in their own facilities. With these historical low rates, and no up-front fees, now is the time for business owners to consider expansion of their facilities. Our CDC members are working hard with our bank partners, and we have money available for sound business expansion projects." Crawford said.  

    Crawford went on to predict, "When I talk to CDCs and our bank partners around the country, I hear a good deal of unanimity on what will happen as borrower demand for fixed asset financing picks up this year.  Small business borrowers and banks are going to turn to SBA 504 loans in record numbers for their long term financing when they start expanding again. There is just no better deal available for the purchase of real estate, or for expansion of existing facilities. I urge any business owner thinking about expanding to call their banker and ask about the SBA 504 program.”  

    About the Lakeshore 504

    Lakeshore 504 provides healthy small and medium-size businesses with long-term fixed rate financing for the acquisition or construction of fixed assets through the SBA 504 program.

    Small businesses may finance up to 90% of fixed assets at or below market interest rates through the Lakeshore 504 program.

    If your company would benefit from a Lakeshore 504 loan, please contact Doug Kuiper, dkuiper@lakshore504.org, visit the web site at www.lakeshore504.org or you may contact Doug directly at 616.392.9633.

  • February Interest Rates

    20 Year Loan Rate - 4.60%

    10 Year Loan Rate - 4.59%