12.5.12: SBA 504 Program Still Best Opportunity for Owner-Occupied Purchases

The Small Business Administration’s (SBA) 504 loan program provides long-term, fixed-rate financing for owner-occupied commercial real estate and for the purchase of long-term capital assets.  SBA 504 loans are designed to cover up to 40% of a project’s costs with a maximum of $5 million in funding; however, the Certified Development Companies (CDC) partners with a bank that provides 50% of the project financing and the borrower typically puts in 10% as a down payment.  The rate on the SBA portion of the loan (the 40% piece) is fixed at 4% for 20 years for loans that were funded by the most recent SBA debenture in December 2012.  This rate is the lowest recorded since the program’s inception.  Below is a chart exhibiting the history of the SBA 504 rate over the past 24 months:

2012, %

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
4.83 4.70 4.58 4.74 4.45 4.49 4.45 4.44 4.27 4.25 4.16 4.00

2011, %

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
5.73 6.06 5.93 5.89 5.63 5.51 5.58 5.13 4.69 4.83 4.94 4.94

The SBA’s 504 loan program provides long-term, fixed-rate financing for small business owners nationwide. Since the program’s inception, 504 loans have funded over $62 billion in loans to over 130,000 small businesses. In turn, those small businesses have created or retained over 2.1 million jobs for the U.S. economy. CDCs continue to work with small business owners who are taking advantage of these record-low interest rates to purchase, build and expand their facilities or purchase capital-intensive machinery and/or equipment.

Advertisements
This entry was posted in Michael D. Sneden, News & Recent Closings, Owner-Occupied Loans, SBA, SBA 504, SBA Loan Processing, SBA Loans, The Banker's Mortgage Conduit, Valuexpress and tagged , , , , , , , , . Bookmark the permalink.

One Response to 12.5.12: SBA 504 Program Still Best Opportunity for Owner-Occupied Purchases

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s