United States Small Business Administration 504 Loan Program Reaches $75 Billion

The 504 loan program from the U.S. Small Business Administration is an effective and successful program to help small businesses. SBA 504 loans are made by local certified development companies throughout the country, working with local lenders. SBA 504 loans help owners of expanding or startup small businesses to buy real estate, buildings and equipment.

The 504 loan program has recently reached $75 billion in direct funding. This amount was raised by the Small Business Administration through private bond sales to finance almost 145,000 small business loans around the United States. These bonds were part of a larger series of loan funding packages that provided nearly $190 billion that helped small businesses. On average, the 20-year debenture rate for the last twelve-month period was 2.88%. This translates into an ongoing Effective Rate of 4.65% for the loans, just 40 basis points above the average Prime Rate for this period.

The loan program has been credited with the creation or retention of over 2 million jobs since 1991.

The Small Business Administration has addressed industry requests and authorized the issuance of 25-year fully amortized loans in the 504 program. The first sale is expected to take place in July. The new loan option comes at the perfect time as the Federal Reserve Bank is working to move away from its accommodative monetary policy with additional rate increases planned into the next year.

Want to learn more about how a SBA 504 loan can benefit you? Contact our team at Cascade Capital Funding and find out more.

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