SBA 504 UPDATE – April Update

SBA 504 Loan Performance

In a week that saw continued strength in equities and a late spike in Treasury rates, it is important to note how the 504 loan program is delivering fixed rate funding for small business borrowers at rates significantly below the Prime Rate.

On Thursday the 504 program priced its 20 and 25 year debentures at rates that continue to decline and more importantly, at ongoing effective rates that are dramatically lower than banks’ base lending rate. Of particular interest is that 46% of the $360,347,000 total that was funded was in the program’s relatively new 25-year maturity. The growth in demand for this maturity has steadily risen since its introduction in July 2018, and now totals 940 loans for $786,957,000.

The commentary above is provided by Eagle Compliance, LLC (Eagle). Eagle is responsible for the marketing, pricing, and sale of the certificates (debentures) sold to investors to fund the SBA 504 Loan Program.

Fundings for 10-year 504 loans are provided on an every other month basis. The effective rate above represents the March, 2019 funding.

Mike Kinderman, ext. 32 mike.kinderman@tcmcdc.com 
Heidi Pautsch, ext. 14 heidi.pautsch@tcmcdc.com