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What are CDC/504 loan interest rate/costs/fees?

The rate on the SBA portion of the 504 loan is set when the CDC sells the bond to fund your loan. The rate is then fixed for the loan term. 504 Bonds are amortized securities.

  • Interest Rate:
    • Variable and Fixed Rate Plans (based on project and lender’s requirements)
    • SBA CDC Rates are based on current treasury rates
    • The effective annual percentage rate (APR) will include program and guaranty fees
    • Lender’s loan portion is usually prime, plus 2-3 points.
    • Even with all the cost involved with a CDC 504 loan program, the blended rate makes the project affordable to you
    • Bankers qualifies for CRA credits, pass the savings to you, lower their risk
  • Loan Terms:
    • Loans are self liquidating for 10 or 20 years
    • Most lenders will lend on 15-20 year term and a 20 year payout
  • Prepayment Penalty:
    • Declining Scale (depend on lender)
  • Application Fee: varies based on lender (one-time, non-refundable)
  • Loan packaging fee: varies based on lender
  • Success Fee based on loan size (ABC points never exceed 3%)
    • Success Fee is paid upon loan funding
  • SBA Guaranty fee: 1.75% – 2.75% of the loan amount
  • Fees can be financed in the loan

How can my small business apply for a CDC/504 loan?

To apply for a CDC/504 loan, entrepreneurs should contact the nearest CDC to them by getting a listing from their SBA District Office.