25-YR FIXED RATE
6.39%
20-YR FIXED RATE
6.41%
10-YR FIXED RATE
6.20%
REFINANCE RATE
+0.025%
empowering economic growth
504 loan program
MAY 2025
SBA 504 FIXED EFFECTIVE RATES
(monthly servicing fees included)
The May 2025 SBA 504 debenture pricing:
- Comparable Treasury Market Rate: 4.32%
- SBA 504 Debenture Rate (20-YR): 5.12%
- SBA 504 Debenture Rate (25-YR): 5.07%
- 20-Yr Debenture Pool: $30 million (33 loans)
- 25-Yr Debenture Pool: $451 million (385 loans)
Next pricing date is June 5, 2025
SOP 50 10 8
SOP 50 10 8, which takes effect June 1, 2025, includes the following changes to the 504 Program.
- Franchise guidance and the franchise directory were brought back
- Details for ineligible business models were added back, including clarity on passive businesses (including ghost kitchens, office suites, salons, etc.), gambling businesses, marijuana and hemp businesses, and prior loss/delinquent federal debt
- New citizenship requirements recently implemented have been incorporated
- Prior guidance added back on credit elsewhere, which is a function of the liquidity of 20% or greater owners and the Applicant itself
- 6-month lookback language for personal guarantees has been added back
- Hazard insurance waiver removed and replaced with prior guidance requiring hazard insurance on loans of $50,000 or more
- Removed waiver of a PFS for supplemental guarantor – required for all guarantors
- Environmental procedures recently implemented have been incorporated
- SBA will prioritize processing loans for veterans
- All recent changes to 504 debt refinance programs have been incorporated
- “Other Secured Debt” must be current for 12 months
- Clarified existing guidance requiring an appraisal at application for any project involving a business acquisition / non-arm’s length change of ownership, and that the purchase price is limited to the lesser of the as-is appraised value or the purchase price of the 504-eligible fixed assets – no appraisal shortfall allowed
- Added existing guidance on ALP Express
- Re-implemented a cap of $16.5 million in outstanding gross debentures for 504 Eligible Energy Public Policy projects
Growth Corp is here to provide ongoing SBA 504 loan support and training. So whether you want to schedule a time to review a potential project or set up a presentation for your lending team, we’re here to help you reach your goals.
LOWER FEES FOR FY25
SBA issued Information Notice 5000-859701, announcing the fees for 504 Loans approved during FY2025 will be 3.3 basis points lower.
The following will be effective for 504 loans approved October 1, 2024, through September 30, 2025:
- The upfront guaranty fee remains at 0% in FY25
- The annual service fee decreased from 0.364% in FY24 to 331% in FY25
- For 504 refinance loans, the annual service fee decreased from 0.389% in FY24 to 0.356% in FY25
504 Approval Stats Fiscal Year-to-Date
- Nationwide: 3,914 approvals for $4.5 Billion
- Illinois: 174 approvals for $184 Million
- Growth Corp: 105 approvals for $97.4 Million
Quick Links for Lenders
Interest Rate History
Loan Calculator
504 vs 7a
Quick Qualifiers
Forms
Recent News…
The Strength of SBA 504
Amid the media storm surrounding ongoing government changes, we wanted to focus on the strength of SBA 504 lending. Overall, 504 loans are a great example of a public-private partnership...banks see a mitigation of risk and a host of other benefits, while growing...
More Businesses Are Now Eligible for SBA Growth Capital
We have good news…more businesses are now eligible for SBA growth capital as SBA has taken steps to significantly improve its 504 Loan Program to better meet the needs of today’s business owners. More and more small to mid-size business owners are turning to SBA...
Growth Corp has long participated in the VetLoan Advantage program. This initiative aims to increase access to the 504 Loan Program for our nation’s brave veterans. Ask about the special discounts we offer veterans…it’s Growth Corp’s way of giving back as we strive to meet the needs of veteran-owned businesses.
Project-Specific Solutions
EXPANSIONS
Equipment Purchases
Building Acquisitions
Land Purchases
New Construction
Leasehold Improvements
HOW THE 504 HELPS
Long-term fixed rates
Predictable payments
No future balloons
Low down payments
REFINANCING
Real Estate Loans
Lines of Credit
Consolidate Multiple Loans
Obtain Working Capital
Cash-Out Available
HOW THE 504 HELPS
Eliminates balloon payments
Fully amortized
Existing equity = down payment
Can provide a cash out option
GREEN ENERGY
New Builds w/ Sustainable Energy
Energy Efficient Upgrades
Energy Generating Equipment
Reduction of energy consumption by 10%
Increased use of sustainable design
HOW THE 504 HELPS
Removes $ limit on 504 portion
Borrowers can take multiple loans
Slashes the bank’s risk to 50%
Up to $5.5 million per project
Growth Corp is Your Partner!
We know the focus of commercial banking is to support the community and entrepreneurial sector. And so is ours! The 504 Loan Program is a partnership with banks that offers many benefits:
- Banks reduces their risk to 50%
- Banks gets first lien position on a 504 loan structure
- When clients are struggling with pending balloons, Growth Corp’s 504 offers refinancing options
- Banks can offer their clients a low, fixed rate product with a long loan term
- SBA lending helps Banks fulfill CRA, Rural and Public Policy goals
- Manages commercial real estate concentration issues
- Opens up lending availability
- Maximizes middle market lending
- High size limits and business size caps
- Preserves working capital, which keeps cash in deposit accounts
- Unique marketing opportunity
- Finances heavy machinery and equipment
- Attracts new borrowers
- We are your partner, not your competitor…you keep your clients
- The 504 Loan Program can be used multiple times
We are not your competitor…we’re your partner! As the largest 504 Lender in Illinois, we partner with hundreds of banks on commercial loans ranging from $200,000 to over $5 million. We’ll coordinate the entire 504 Loan process and work to ensure everything goes smoothly for your client.
Remember, SBA 504 Loans are offered in conjunction with local banks…not in competition with them.
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What are some key points for Lenders?
- Bank provides interim financing and sets the interim interest rate
- Bank’s term must be at least 10-years with Growth Corp’s 20- and 25-year bonds. And no less than 7 years with a 10-year bond
- Bank gets first lien position
- Advance is up to 95% of the appraised value on real estate – (5% variance)
- Bank is free to adjust the rate on the permanent loan at any time
- The economic life of the asset to be financed needs to meet or exceed the loan term.
- The size standards for businesses are: a tangible net worth of less than $15 million and profits (after taxes) of less than $5 million (including affiliates)
Can 504 Loans include soft costs?
Yes. Soft costs (e.g. appraisals, environmental, construction interest, closing costs, etc.) can be financed into the 504 loan, which allows small businesses to preserve working capital.
Who is eligible for the 504?
- Be operating a for-profit business
- Be organized as a corporation, sole proprietorship, partnership, LLC, etc.
- Be located in the U.S.
- Have a tangible net worth of less than $15 million and profit after taxes of less than $5 million (including affiliates)
- Have a successful track record and growth potential
- Occupy majority of project property (or owner-occupied property)
Projects that qualify must, according to SBA guidelines, promote economic development, which generally means the creation or retention of jobs. Overall, most small businesses will qualify!
What are the collateral requirements?
- The 504 loan is secured with a subordinate lien on all project assets.
- The 504 loan must have a security interest in all project assets.
- Existing liens are recognized for building expansions and renovations, but may also be refinanced with a 504.
- Personal guarantees of all principals owning more than 20% of the company are required.
- If the business is a start-up, or the asset being financed is considered single-purpose, or the credit is unusually risky, additional collateral may be required.
- Key man life insurance is typically required unless there is a strong management succession plan.
- Adequacy of collateral is a credit decision – additional collateral can be required by Growth Corp or SBA.
Now Available! Simultaneous Closings…
Growth Corp has expanded its service offering to be able to provide simultaneous closings between the bank’s financing and the 504 financing.
- Expedites funding
- Straight acquisitions or deft refi only
- 504 docs signed at bank closing
- Funding is the 7th of every month
A Sampling of Our 504 Projects
Growth Corp is the top CDC in Illinois, the largest 504 Lender in Chicago and a top ten 504 Lender Nationwide, but we're still just a small, focused team working together every day to make the 504 process the best it can be.
We know that when it comes to 504 loans, it's about much more than just getting an approval. It's the ease-of-mind that comes from knowing Growth Corp's team has their finger on the pulse of the process from application to funding and even beyond into long-term servicing. It's knowing you will be informed every step of the way by the point-person responsible for overseeing the closing of your loan. It's knowing that, given Growth Corp's extremely low turn-over, you'll have the same experienced team members continuing to serve you year-after-year.
SBA recognized Growth Corp as an Accredited Lender after a thorough review of its policies, procedures and prior performance. The prestigious ALP status grants Growth Corp increased authority to process and close 504 loans, which results in an expedited process for both borrowers and lending partners. In addition, under the ALP Express Program, Growth Corp has been granted the authority to approve, authorize, close and service SBA 504 loans of $500,000 or less.
Quality, accuracy and quick turn-around times are just some of the reasons why Growth Corp is the top CDC in Illinois, the largest 504 Lender in Chicago and a top ten 504 Lender nationwide. But, remember, we're just a small team working together every day to make the 504 Loan process the best it can be.
SBA 504 LOANS
How Will You Grow Your Business?
877-BEST 504
www.GrowthCorp.com
A Non-Profit Organization Focused Exclusively on Small Businesses
