SBA 504 Loan Program

THE 504 ADVANTAGE

The SBA 504 Loan Program can save you thousands of dollars of interest over the life of your loan when compared to a conventional floating interest rate loan. Look at the examples of what could happen if interest rates go up in the next twenty years and compare it with a 20 year fixed rate 504 loan.

Example - a conventional floating interest rate is commonly prime plus 1% floating. The loan fee is usually at least 1%. If we assume that the prime rate will begin at 9% and increase to 10% after five years and 11% after ten years, the following table shows the interest saved on a $500,000 debenture, financed with a conventional loan and then a SBA loan with a 8% fixed interest rate.

Conventional Loan Prime % Year Interest Rate Months Total Payments Total Interest Paid   1999     5,000   9% 1999-2004 10% 60 289,506.60 238,733.78 10% 2004-2009 11% 60 306,273.00 228,041.06 11% 2009-2019 12% 120 638,151.60 267,649.29         1,238,931.20 734,424.13  SBA Loan 8% 1999-2019   240 1,003,728.00 503,728.10 Total Savings: 230,696.03

Investigate the possible savings and benefits of using a 504 loan for your business facility purchase, construction or expansion. Use the 504 program to grow or expand your business.

To schedule an appointment with a loan officer at Enterprise Development Corporation, please call us at 573-875-8117.