25 Year SBA 504 Loan Now Available

SBA just announced a 25 year term is now available under the SBA 504 loan program! This is in addition to the 10 and 20 year terms that are currently available. The new 25 year 504 loan is offered for SBA 504 projects approved on or after April 2, 2018.

Here are a few more details…

  • The term of any 504 project approved prior to April 2, 2018, may not be extended to 25 yrs.
  • For any 504 project approved on or after April 2, 2018, the term of the 504 loan may be changed with a request to SBA prior to funding.
  • The voluntary prepayment penalty schedule will stay at 10 years for the 25 year 504 loans.
  • The term of the participating lender accompanying a 25 year 504 loan must be at least 10 years.
  • The fee structure is the same as for 20 year loans and debentures.
  • The first pooling date for 25 year debentures (bonds) will be no earlier than July, 2018.
  • The interest rate is expected to be slightly higher than the 20 year rate, and will be set based on market demand and pricing at the time of funding.

The 25 year option for SBA 504 will provide small business borrowers with more choice in financing their long term capital projects, providing a longer repayment term and lower monthly loan payments.