25-YR FIXED RATE
6.09%
20-YR FIXED RATE
6.16%
10-YR FIXED RATE
6.46%
REFINANCE RATE
+0.025%
empowering economic growth
504 loan program
DECEMBER 2024
SBA 504 FIXED EFFECTIVE RATES
(monthly servicing fees included)
The December 2024 SBA 504 debenture pricing:
- Comparable Treasury Market Rate: 4.21%
- SBA 504 Debenture Rate (20-YR): 4.82%
- SBA 504 Debenture Rate (25-YR): 4.82%
- 20-Yr Debenture Pool: $15 million (24 loans)
- 25-Yr Debenture Pool: $388 million (365 loans)
Next pricing date is January 9, 2025
Five Factors Impacting SBA Lending
as We Head into 2025
Improved Refinancing Options
Borrowers looking to access cash can use the equity in their business real estate and heavy equipment to pay off a line of credit, pay off business credit cards, or to cover business expenses such as salaries, rent, inventory, and other expenses incurred within 18 months after the date of application. Plus, the previous 20% cap on eligible business expenses has been removed.
SBA 504 Lending is Up
We’re happy to report SBA 504 lending was up in Fiscal Year 2024…proof that small businesses are utilizing this smart financing source to grow and strengthen their businesses. In fact, in fiscal year 2024, the SBA 504 program delivered 5,993 loans worth more than $6.6 billion to small businesses.
Growing Interest in Commercial Real Estate
Commercial real estate is seeing a comeback and more people are looking to invest. Using the SBA 504 to purchase commercial real estate offers a long loan term of up to 25 years, with low, fixed rates for the life of the loan.
Low, Long-Term Fixed Rates
A long-term fixed-rate mortgage, such as the SBA 504, locks in today’s low interest rates and eliminates concern over future interest rate hikes. Plus they are fully amortized over 10-, 20-, or 25-years, so small businesses owners see predictable and lower monthly payments.
Lower Fees for FY25
The fees for SBA 504 Loans approved October 1, 2024 through September 30, 2025, is 3.3 basis points lower.
LOWER FEES FOR FY25
SBA issued Information Notice 5000-859701, announcing the fees for 504 Loans approved during FY2025 will be 3.3 basis points lower.
The following will be effective for 504 loans approved October 1, 2024, through September 30, 2025:
- The upfront guaranty fee remains at 0% in FY25
- The annual service fee decreased from 0.364% in FY24 to 331% in FY25
- For 504 refinance loans, the annual service fee decreased from 0.389% in FY24 to 0.356% in FY25
504 Approval Stats Fiscal Year-to-Date
- Nationwide: 1,094 approvals for $1.2 Billion
- Illinois: 46 approvals for $47 Million
- Growth Corp: 32 approvals for $30 Million
Quick Links for Lenders
Interest Rate History
Loan Calculator
504 vs 7a
Quick Qualifiers
Forms
Recent News…
A Lender’s Guide to SBA 504 Loans
Attention lenders: when small business owners approach your bank looking for a loan to purchase commercial real estate or heavy equipment for their growing business, are you prepared to meet their needs? What if they lack a sizable down payment? SBA 504 Loan...
SBA 504 Loan Support and Training
From understanding the 504 Loan Program to learning the Refi specifics, Growth Corp is here to provide SBA 504 loan support and training. Our team, drawing from decades of practical experience with 504 lending, is able to provide a unique blend of expertise to our...
Project-Specific Solutions
EXPANSIONS
Equipment Purchases
Building Acquisitions
Land Purchases
New Construction
Leasehold Improvements
HOW THE 504 HELPS
Long-term fixed rates
Predictable payments
No future balloons
Low down payments
REFINANCING
Real Estate Loans
Lines of Credit
Consolidate Multiple Loans
Obtain Working Capital
Cash-Out Available
HOW THE 504 HELPS
Eliminates balloon payments
Fully amortized
Existing equity = down payment
Can provide a cash out option
GREEN ENERGY
New Builds w/ Sustainable Energy
Energy Efficient Upgrades
Energy Generating Equipment
Reduction of energy consumption by 10%
Increased use of sustainable design
HOW THE 504 HELPS
Removes $ limit on 504 portion
Borrowers can take multiple loans
Slashes the bank’s risk to 50%
Up to $5.5 million per project
Growth Corp is Your Partner!
We know the focus of commercial banking is to support the community and entrepreneurial sector. And so is ours! The 504 Loan Program is a partnership with banks that offers many benefits:
- Banks reduces their risk to 50%
- Banks gets first lien position on a 504 loan structure
- When clients are struggling with pending balloons, Growth Corp’s 504 offers refinancing options
- Banks can offer their clients a low, fixed rate product with a long loan term
- SBA lending helps Banks fulfill CRA, Rural and Public Policy goals
- Manages commercial real estate concentration issues
- Opens up lending availability
- Maximizes middle market lending
- High size limits and business size caps
- Preserves working capital, which keeps cash in deposit accounts
- Unique marketing opportunity
- Finances heavy machinery and equipment
- Attracts new borrowers
- We are your partner, not your competitor…you keep your clients
- The 504 Loan Program can be used multiple times
We are not your competitor…we’re your partner! As the largest 504 Lender in Illinois, we partner with hundreds of banks on commercial loans ranging from $200,000 to over $5 million. We’ll coordinate the entire 504 Loan process and work to ensure everything goes smoothly for your client.
Remember, SBA 504 Loans are offered in conjunction with local banks…not in competition with them.
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What are some key points for Lenders?
- Bank provides interim financing and sets the interim interest rate
- Bank’s term must be at least 10-years with Growth Corp’s 20- and 25-year bonds. And no less than 7 years with a 10-year bond
- Bank gets first lien position
- Advance is up to 95% of the appraised value on real estate – (5% variance)
- Bank is free to adjust the rate on the permanent loan at any time
- The economic life of the asset to be financed needs to meet or exceed the loan term.
- The size standards for businesses are: a tangible net worth of less than $15 million and profits (after taxes) of less than $5 million (including affiliates)
Can 504 Loans include soft costs?
Yes. Soft costs (e.g. appraisals, environmental, construction interest, closing costs, etc.) can be financed into the 504 loan, which allows small businesses to preserve working capital.
Who is eligible for the 504?
- Be operating a for-profit business
- Be organized as a corporation, sole proprietorship, partnership, LLC, etc.
- Be located in the U.S.
- Have a tangible net worth of less than $15 million and profit after taxes of less than $5 million (including affiliates)
- Have a successful track record and growth potential
- Occupy majority of project property (or owner-occupied property)
Projects that qualify must, according to SBA guidelines, promote economic development, which generally means the creation or retention of jobs. Overall, most small businesses will qualify!
What are the collateral requirements?
- The 504 loan is secured with a subordinate lien on all project assets.
- The 504 loan must have a security interest in all project assets.
- Existing liens are recognized for building expansions and renovations, but may also be refinanced with a 504.
- Personal guarantees of all principals owning more than 20% of the company are required.
- If the business is a start-up, or the asset being financed is considered single-purpose, or the credit is unusually risky, additional collateral may be required.
- Key man life insurance is typically required unless there is a strong management succession plan.
- Adequacy of collateral is a credit decision – additional collateral can be required by Growth Corp or SBA.
Now Available! Simultaneous Closings…
Growth Corp has expanded its service offering to be able to provide simultaneous closings between the bank’s financing and the 504 financing.
- Expedites funding
- Straight acquisitions or deft refi only
- 504 docs signed at bank closing
- Funding is the 7th of every month
A Sampling of Our 504 Projects
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Growth Corp is the top CDC in Illinois, the largest 504 Lender in Chicago and a top ten 504 Lender Nationwide, but we're still just a small, focused team working together every day to make the 504 process the best it can be.
We know that when it comes to 504 loans, it's about much more than just getting an approval. It's the ease-of-mind that comes from knowing Growth Corp's team has their finger on the pulse of the process from application to funding and even beyond into long-term servicing. It's knowing you will be informed every step of the way by the point-person responsible for overseeing the closing of your loan. It's knowing that, given Growth Corp's extremely low turn-over, you'll have the same experienced team members continuing to serve you year-after-year.
SBA recognized Growth Corp as an Accredited Lender after a thorough review of its policies, procedures and prior performance. The prestigious ALP status grants Growth Corp increased authority to process and close 504 loans, which results in an expedited process for both borrowers and lending partners. In addition, under the ALP Express Program, Growth Corp has been granted the authority to approve, authorize, close and service SBA 504 loans of $500,000 or less.
Quality, accuracy and quick turn-around times are just some of the reasons why Growth Corp is the top CDC in Illinois, the largest 504 Lender in Chicago and a top ten 504 Lender nationwide. But, remember, we're just a small team working together every day to make the 504 Loan process the best it can be.
SBA 504 LOANS
How Will You Grow Your Business?
877-BEST 504
www.GrowthCorp.com
A Non-Profit Organization Focused Exclusively on Small Businesses
By using this website, you understand that Growth Corp is good, but not perfect (although we do try!). Therefore, it is possible that you may find information on this site that is no longer accurate. Links, images, downloads, pages and blog posts may inadvertently contain information that has been superseded over the years. You also understand that we aren’t giving any legal, tax, or financial advice. So, while we hope our site makes you love 504 Loans as much as we do, the content herein is for informational purposes only.