The interest rate on loans made through the U.S. Small Business Administration’s 504 loan program have now reached their lowest point of the year, which should spur business formation and expansion.
The rate for a 20-year fixed rate loan has fallen to 5.29 percent in June from a rate of 5.52 percent last month.
“With financing readily available from the SBA, this is a time to strike for small business owners,” said Todd Kocourek, president and CEO of Florida First Capital Finance. “This rate represents an excellent opportunity for business owners who are looking to invest in their business for the long haul.”
The SBA says its loan rates are set at a predetermined increment above the prime interest rate. In 2009, rates reached historic record lows three times during the course of the year.
504 loans are used by small businesses to buy or refurbish new facilities or purchase equipment.
Even before the rate decrease, 504 loans had seen a sharp increase in popularity. The Orange County register recently reported that lending under the program had increased 183 percent during the first five months of 2010.