Fee Reduction Announced for the
SBA 504 Loan Program!
On August 15, 2017, SBA issued SBA Information Notice 5000-1954 and has provided information on the fees for 504 Loans approved during FY2018.
These changes are applicable only to loans
approved on or after October 1, 2017.
Traditional 504 loans approved during FY2018
The upfront guaranty fee for 504 borrowers will continue to be zero in FY2018.
The annual service fee is reduced from 0.697% (69.7 basis points) to 0.642% (64.2 basis points) of the outstanding balance of the loan. This results in a reduction of 5.5 basis points!
504 Debt Refinance loans approved during FY2018
The upfront guaranty fee for 504 borrowers will continue to be zero in FY2018.
The annual service fee is reduced from 0.731% to 0.682%, a resulting reduction of 4.9 basis points!
This annual service fee reduction is figured into the overall effective SBA 504 interest rate for the borrower.
In comparison, the 20 year effective interest rate in September, 2017, on a traditional SBA 504 loan, was 4.38% fixed for the 20 year period. With the fee reduction, the 20 year effective rate would have been approximately 4.33%.
The September, 2017. the overall effective rate on the 504 Refinance Program was 4.42% fixed for the 20 year period. With the fee reduction, the overall effective rate would have been approximately 4.37%.
This is exciting news for our Small Business Owners!
Give your MBFC Business Development Officer a call today for more details.
The September 2017 overall effective rates are:
20 YEAR
Standard SBA 504 Loan at 4.38%
Refinance SBA 504 Loan at 4.42%
10 YEAR
Standard SBA 504 Loan at 4.15%
Refinance SBA 504 Loan at 4.20%
If you would like to access this TI Memo or the SBA Information Notice via the NADCO website, please click below.