The SBA 504 Loan Program offers a low, fixed rate based on a debenture bond sale. This occurs once a month for 20-year loans and every
other month for 10-year loans.
Interest rates on PADD's 504 loans are set by the market. The interest rate on a borrower's 504 loan is
fixed to the current market rate at the time the SBA sells a debenture bond to fund the loan.
Servicing fees based on principal are rolled into the monthly payment.
The interest rate established by the participating lender is negotiated directly with the business owner.
Most Recent SBA 504 Interest Rates
10 Year Amortization
20 Year Amortization
Monthly SBA 504 interest rates are standardized nationally and do not vary based upon
which Certified Development Company (CDC) you utilize.
Most CDC's advertise the Effective Rate as the most accurate depiction of the program's
interest rate. However, some CDC's will market the program's lower Note Rate which only includes the cost to repay the bonds and does not include on-going servicing fees. While
this may be an effective marketing tool, it underestimates the true cost of the loan to the borrower.
The Full-Term Effective Rate is widely considered the most accurate rate to advertise to
SBA 504 borrowers and it is the rate that PADD utilizes in marketing the SBA 504 program and underwriting new loans.