Earlier in this message we highlighted the SBA promotion (enhancements) of the 7(a) program as a tool to help small businesses during the COVID-driven economic decline. Many of the relief provisions under the CARES ACT elevate the SBA 504 program also, including fee reductions and an extension of payment subsidies for new 504 loans.

In a nutshell …

Temporary Fee Reductions
• Fee reductions for new 504 loans approved from the date of enactment of the new law (December 27, 2020) through September 30, 2021.
• Waives 0.5% Third Party Lender Participation Fee – on loan in senior lien position in 504 projects.
• Waives 1.5% CDC processing fee (in debenture pricing).
• SBA guidance expected to address handling of all loans currently in process at SBA.
Debt Forgiveness
• 3 months of payments subsidies, capped at $9,000 per loan per month, for new SBA loans approved (February 1, 2021 – September 30, 2021)

Some of these terms may look familiar, some will be new. That’s to be expected – these are different loans, although both are sponsored by the SBA.

What rate structure can you expect today? (504 Interest Rates Feb. 2021)
25 Year Purchase Rate: 2.752%
25 Year Refinance Rate: 2.794%
20 Year Purchase Rate: 2.714%
20 Year Refinance Rate: 2.757%
10-Year Purchase Rate Jan. & Feb.: 2.438%

So, what’s the difference, 504 or 7(a)? Which one should you consider for your situation – which is the best fit? How do you find out? Where do you go? (Yes, you can try Google!) Who should you call? Loaded questions all!

For “counsel” about SBA loans, or other types of real estate financing, contact us at the Counsel Mortgage Group.

We work for you, not for the lender. We offer a variety of products and services, ask us how we can assist you today.

Today’s post is written by Michael Green, Commercial Loan Originator for Counsel Mortgage Group, LLC.

Counsel Mortgage Group®, LLC
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