SBA 504 Rates for the Current Month
504 loan rate for Commercial Real Estate at 5.21%*
The 504 program actually consists of 2 loans:
- first mortgage for 50% of the project cost
- 504 second mortgage guaranteed by the SBA
First Mortgage Rates: Currently range from approx 5.5 to 7% depending on loan size, term and property type. Loan is typically amortized for 20 to 25 years.
504 Second Mortgage Rate: 5.21% - fixed for 20 years.
SBA 504 Equipment Loans are typically 10 years and approximately 1% lower.
First mortgage rates can vary depending on the type and size of the loan, but the most popular type is the 5 year fixed rate which has been in the 5.5% to 6.5% range all year. It is fixed for 5 years at the start rate, re-indexed each 5 years thereafter and is typically fully amortized over 20 to 25 years.
The second mortgage is a 20 year fixed rate.
The combination of the 2 loans - which are both fully amortized long term - and the fact that the second mortgage is permanently fixed make for a very attractive package.
SBA 7a Rates
SBA 7a loan rates are much simpler as they are typically Prime + a margin not to exceed 2.75%, but they can also be pegged to the one month LIBOR rate.
The margin for the 7a loan is set by the lender based on their cost of funds and the quality of the loan.
504 Loan Payment Example
Here is an example of loan amounts and payments for a $1.5 million transaction with 10% down and a 1st mortgage rate of 6.0%:
Project Cost: $1,500,000
Down Payment/Equity Injection: $150,000
First Mortgage: $750,000
Second Mortgage: $600,000
The payments would be as follows:
First Mortgage: $4832.26
Second Mortgage: $4029.66
Total of Payments: $8861.92
As you can see, the 504 offers a very low payment with the least out of pocket and it compares very favorably with any other commercial loan program.
It is available purchase, refinance or renovation of owner occupied (owner-user) commercial property.
More SBA 504 Loan info: 504 Loans
Please contact us at 1-800-414-5285 to find out how our expertise with the SBA 504 can help your business.
* rate includes fees to SBA, CDC and central servicing
agent. (Rates change monthly).
