Leisure Real Estate Blog

Historically low rates for SBA 504

Friday, August 13 2010 9:54 AM
Categorized In Industry News

Check this out!!  The SBA posted its August rates for the 504 program and the effective rate is lowest it has been in 20 years.  The 4.93% is the effective rate, which means the fees are included in the rate calculation.  For those unfamiliar with the 504 program, the 4.93% is a fixed rate for 20 years.  As most of us in the business know, this is an extremely low rate, especially hotel loans.  40 to 50% of the loan package will be the SBA portion…..the rest is funded by a tradional bank, with the borrower providing  the balance is equity.  These loans require some extra paper work and fees, but they are certainly worth considering, especially when one considers that a traditional non-SBA loan for a hotel deal will often require upto 40% down.

If you are looking to purchase a hotel and you satisfy the SBA requirements, you will not find a better 20 year fixed rate.  What do you think?

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