SBA 504 Loan Interest Rates

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March 2024

25-Year Fixed Rate Standard:

25-Year Fixed Rate Refinance:

20-Year Fixed Rate Standard:

20-Year Fixed Rate Refinance:

10-Year Fixed Rate Standard:

10-Year Fixed Rate Refinance:

Official monthly SBA 504 effective interest rate tables can be found at Eagle Compliance LLC. 25- and 20-year term loans fund every month; 10-year term loans fund every other month. Effective interest rates are inclusive of servicing fees, which are subject to credit risk of the applicant.

Servicing the States of Alabama, Florida, and Georgia.

SBA 504 Loan Helps Restore Iconic Florida Beach Motel

Welcoming guests since 1946, the Salt Air Motel in Atlantic Beach has become an icon of a time gone by, where the entire family would load up the family “truckster” and head out for an adventure on the open road.

Many times along this stretch of Florida coastline, these adventures led surf seekers to the doors of the Salt Air Motel located near the Beaches Town Center area, which is the heart of Atlantic Beach and Neptune Beach, and referred to by the locals as “The Corner” – a pedestrian friendly entertainment destination with several shops, restaurants, bars and hotels/motels that extends from the ocean three blocks west to A1A.

Having founded Beach Life Rentals, a one stop shop for bicycles, paddleboards, boogie boards, surfboards and kayaks as well as tables and chairs for beach use, Curt DeWitt knew the value of this iconic motel landmark.

Partnering with a long-time friend, Kyle Stucki, the pair set out to purchase and revitalize the Salt Air.  The property consists of four structures – three single-story motel buildings totaling 5,302 square feet built in 1946 and a two-story, 1,652-square-foot building developed in 1975.

With a total cost of $1.7 million, the partners worked with Florida First Capital and financed the project through the Small Business Administration (SBA) 504 Loan Program, allowing them to take full advantage of significant cost saving benefits offered by the program.  Key among these are a low down payment structure, below-market fixed interest rates and long amortization terms that keep out-of-pocket expenses low and enable the crucial preservation of working capital.

However, in order to secure the interim financing needed for the lengthy renovations, the commercial lending partner in the 504 deal turned to a program offered by Florida First Capital known as the 504 Bridge Loan.

Under the SBA 504 Loan Program, commercial lenders partner with a certified development company like Florida First Capital to provide small business owners with up to 90% financing for the purchase of owner-occupied commercial real estate and/or fixed machinery and equipment.

Typically, a 504 loan is structured whereby a commercial lending partner finances 50% of the project and holds the first mortgage.  Florida First Capital/SBA finances 40% of the deal and holds the second mortgage.  The borrower provides a 10% down payment.

One of the most critical stages for a commercial lending partner in an SBA 504 loan project is the interim phase between the commercial lending partner’s closing and the permanent takeout of the second mortgage by the SBA, during which time the commercial lending partner is at risk on the second mortgage.

The 504 Bridge Loan Program addresses this exposure and timing difference by providing commercial lending partners with bridge loan funds to cover the second mortgage during the interim period of the project until the permanent SBA second mortgage offered through the 504 program takeout occurs.

“We were able to offer a complete financing solution for the Salt Air project between a 504 loan and an interim bridge loan,” said Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida.  “The 504 Bridge Loan Program is great for projects where construction plays an important and often times lengthy role in the process and helps make for a smooth transition to permanent financing by alleviating interim risk for our commercial lending partners.”