504 Rates for the 2018 1st Quarter

Rates for the first quarter of 2018 increased slightly over prior months. Still, borrowers with loans from January through March debenture pools saw their rates fixed for 20 years at under 5%!

See below for 504 rate trend line for the 2018 1st quarter.

504 Program Adds 25 Year Debenture Option and Modifies Credit Elsewhere Rule.

Beginning with projects approved on or after April 2, 2018, borrowers will have the option of choosing between 10, 20 and 25-year maturities for 504 Loans! The key provisions are:

1. Previously approved deals may not be extended to 25 years.

2. SBA currently expects the 25-year debentures to sell monthly, just as the 20-year debentures do. 10-year debentures are sold only every other month.

3. There will still be a declining prepayment premium over the first 10 years of the 25-year term.

4. It is anticipated that the first debenture pool with a 25-year term will occur no earlier than July 2018.

5. The term of the Third-Party Lender Loan must be at least 10 years, again, similar to the 20-year debenture.

By extending the term of the 504 portion of the project by 5 more years, borrowers will be able to lower monthly payments and improve all-important cash flow for their businesses. This addition to the 504 Program provides another tool to lenders to help small businesses succeed and prosper.


SBA has revised its “Credit Elsewhere” requirements to increase the threshold for those who are subject to an inquiry on their personal liquidity from 10% owners to 20% owners. These changes should simplify the underwriting of both 7(a) and 504 loans going forward by limiting the number of individuals subject to the personal resource review—another step toward making capital more available, more quickly, for small businesses.

This entry was posted in Articles.
  • About the Author


    Thomas M. Woebkenberg

    Tom Woebkenberg practices in the firm’s Real Estate Practice Area. His practice consists primarily of commercial real estate transactions. He represents lenders of all sizes throughout Ohio and Northern Kentucky.

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