Today’s SBA Loan Rates
We are going to go over the current SBA loan rates and break it into two categories:
1. SBA 7a loans
2. SBA 504 loans
Both are very different and need attention a lot so we will describe what the current rates are separately, and give a brief description of the programs themselves.
SBA Loan Rates on 7a Loans
Almost all banks tie their 7a loans to Prime Rate, which can be currently at 3.25%. Banks margin is usually 2.75%, therefore the Effective Rate for that borrower is at 6%. It is extremely uncommon within this marketplace for a bank to offer a powerful rate lower than 6%. Most banks are reluctant to lend, therefore they certainly they are currently maxing out their margin.
Also, the SBA 7a loan, can be used for the purchase or refinance of commercial real-estate, business goodwill, equipment, debt consolidation loan (limited) and working capital. The borrowed funds is practically always amortized over 25 years and also the rate floats with Prime, adjusting quarterly. Prepayment penalty is 5% year one, 3% year 2, 1% year 3, gone thereafter. Loans can move up to ,000,000.
SBA Loan Rates on 504 Loans
The SBA 504 loan, has two different loans and for that reason it has 2 different rates. The first lien position loan is a conventional mortgage, so its terms and rates vary from one lender to the next. Through the most typical loan will be a 5 year fixed on the 20 or 25-year amortization schedule. As an example, our 504 loans are linked with the LIBOR 5 Year Swap, which is currently at 2.15%. The margin depends upon the financial strength with the borrower plus the loan size, nevertheless the Effective Rate is currently between 5.8% and 6.2%, over a twenty-five year amortization schedule. Theses loan also come in a 1, 3 or ten year fixed rates, on a 15, 20 or 25-year amortization schedules.
The 2nd lien loan will be the SBA loan also referred to as the CDC loan, it???s a 20 year fixed loan on the 20 year amortization schedule. The existing debenture minute rates are 5.79%.
Hope you enjoy our SBA Loans article
