July 2021 SBA 504 Interest Rates Are Out

The July 2021 SBA 504 debenture pricing was competed on July 8, 2021.

25 Year Term 2.81%

20 Year Term 2.69%

10 Year Term 2.59%

The SBA is offering a 504 Loan with a 25-year maturity for the acquisition of owner-occupied commercial real estate and related costs. This is in addition to the 10 and 20 year loans currently available in the 504 Loan Program. Loans are typically eligible for up to 90% financing of project costs. Rates include monthly servicing fees to CDC, SBA, and central servicing agent; based on SBA FY21 fees. SBA 504 refi rates are approximately 4 basis points higher than debenture pricing noted above.

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SBA 504 Program Popularity at All-Time High

The SBA 504 program is experiencing record growth as more lenders expand their portfolios with SBA lending. The borrower-friendly terms of the 504 are attractive to existing and new small business clients seeking to buy, build or refinance commercial real estate and heavy equipment.

Source: June 2021 SBA 504 Connect Quarterly Update. Time period comparison of lending activity through 5/31 of each FY.

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“We love the 504 program because it allowed us to get fixed, long term financing on the property purchase, buildout, and equipment, setting us up for long term success. It is a proven winner and we love the partnership with SomerCor given the staff’s care and involvement in their customer base.”
–  Luke Goucher, Owner

Founded in 2018, Obscurity is a brewery, mead distillery, and restaurant based in Elburn, IL. The location required extensive renovations and heavy equipment purchases to transform the property into a 7,100 square foot establishment. By utilizing the 504 instead of a conventional loan, the required down payment dropped from 20% to 15%, leaving significantly more liquidity for the owners during the critical start up phase of the business.