August 13, 2010 9:54 am
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 traditional 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 up to 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?