SBA 504 Effective Rates for January 2021

25-year – 2.70% / 2.74% Refi
20-year – 2.66% / 2.70% Refi
10-year – 2.45% / 2.48% Refi

DISCLAIMER: The following text is from legislation only. There has been no SBA guidance issued yet, so we have no information on how the following topics will be implemented and regulated. All information is subject to full pending SBA implementation guidance and much remains uncertain until that is received.

Congress has passed a coronavirus relief/economic stimulus bill on December 27th, 2020. The Legislation includes the following provisions impacting the 504 Loan Program:

Temporary Fee Eliminations:

For new loans approvals from December 27, 2020 through September 30, 2021: Waives 0.5% Third Party Lender Participation fee—on loan in senior lien position in 504 project.

CARES Act Section 1112 Payments:

Will not be treated as taxable income to the borrower for federal income tax purposes. Any tax deduction arising from these payments subsidies will accrue to the borrower as if the payment was made by the borrower. Small businesses should consult their tax professional for specific guidance on tax issues.

504 Program Relief:

Congress appropriated $3.5 billion to extend payments to existing and new SBA borrowers:

Qualifying loans approved prior to CARES Act (March 27, 2020):

• 6 months of payment subsidies (funded borrowers may have already received this relief under the original CARES Act)
• 3 months of payment subsidies starting February 1, 2021 capped at $9,000 per loan per month
• Additional 5 months (after 3-months) payment subsidies for loans to *“Hard-hit” borrowers, capped at $9,000 per loan per month

*”Hard-hit” NAICS Codes: 61; 71; 72; 213; 315; 448; 451; 481; 485; 487; 511; 512; 515; 532; and 812 – According to https://www.census.gov/eos/www/naics/

Qualifying loans approved during the original CARES Act (March 27, 2020-September 27,2020):

• 6 months of payment subsidies

Qualifying loans approved February 1, 2021-September 30, 2021:

• 6 months of payment subsidies, capped at $9,000 per loan per month

Loans approved September 27, 2020-January 31, 2021:

• No payment subsidies because the congressional intent of Section 1112 payment subsidies was to provide “relief” to existing borrowers in place at the onset of the pandemic and to stimulate new loans that would not otherwise occur because of the pandemic.

Debt Refinance Program WITHOUT Expansion:

• Elimination of prohibition on refinance of any government-guaranteed debt (such as the 7(a) program).
• Reduction from 2 years to 6 months required time that Qualified Debt must not be in place for refinance eligibility.
• Elimination of requirement that loan must have been current for not less than 1 year prior to application date.

Debt Refinance Program WITH Expansion:

Congress presents an increase in amount of debt eligible for refinance from 50% of expansion costs to 100% of expansion costs.

The 504 program relief information above was provided by NADCO. Thank you to NADCO for being a small business advocate during this hard time and providing NWBDA with the legislative information. This is an ever changing situation, and new programs and rules are still being implemented and changed. We will so our best to continuing relaying accurate information.

Willamette Valley, Central,
Eastern & Southern Oregon
Evan Heriot
eheriot@nwbusiness.org
(541) 228-5015

Western Washington

Mark Beppler
mbeppler@nwbusiness.org
(425) 505-3263

In the month of December, NWBDA helped
create 48 new jobs
in the local communities

info@nwbusiness.org
www.nwbusiness.org
(509) 458-8555 (800)
540-1748 (Toll Free)

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