Current SBA 504 Loan Rates

What changed this month

The September sale priced the 25-year debenture at an effective 6.54%, with the 20-year at 6.53% — the two within a basis point of each other, as they have been all year. That is about a quarter point above August and the sixth straight monthly increase, the largest single move this year. None of which predicts October. What matters if you are funding in the next thirty days: the rate is set at the sale your loan funds in, not at approval, and once set it never moves again for the full 10, 20 or 25 years.

How SBA 504 rates are actually set

Nobody who publishes a 504 rate explains where it comes from. Here it is.

The SBA doesn't lend the 40% itself. Once a month, the 504 loans approved across the country are pooled and funded by selling debentures, bonds guaranteed by the U.S. government, to investors. The price investors pay that day, expressed as a spread over the matching U.S. Treasury, becomes the note rate for every loan in that month's pool. That's the whole mechanism. Your rate isn't negotiated with NSDC or with the SBA. It's set by the bond market on sale day.

Three consequences follow.

• The rate is set at funding, not approval. You're approved in one month and funded at a later sale, so the rate you're quoted at approval is a forecast, not a lock. The number that applies is the one from the sale your loan funds in.
• Once set, it never moves. The debenture is a fixed-coupon bond, so the note rate is fixed for the entire 10, 20 or 25 years. There's no reset, no balloon, no index.
• The rate tracks Treasuries, loosely. A 25-year debenture prices off long Treasuries plus a spread that reflects investor demand that month. When Treasury yields move, 504 rates follow within a sale or two. When they don't, the spread is usually the explanation.

The debenture calendar: 20 and 25-year debentures are sold monthly; 10-year debentures are sold every other month. NSDC has been through more than forty years of these pricings. What a debenture is, in more depth.

Note rate vs effective rate

Two numbers describe every 504 loan, and sites mix them up constantly.

The effective rate is what you actually pay each month, and it's the number to compare against a bank quote. It's also why two CDCs can publish different effective rates off the same debenture sale: the CDC servicing fee is set by each CDC within the SBA's range. When a page shows a 504 rate without saying which one it is, assume it's the lower one.

SBA 504 rate history, 2013 to today

Effective rates on the 20- and 25-year terms as published by NSDC each month; the two have printed identically in every month shown. The full record back to 2013 is on this page.

One honest paragraph of interpretation: the last twelve months ran from the high fives to the low sixes and back, a range of under a point, while long Treasuries did the same. Nothing in that record predicts next month. What it does show is that every year since 2022, a borrower who waited for a better month paid rent while waiting.

Should you lock this month or wait?

You can't time it, and neither can we. The rate is set by a bond auction, and the people who trade those bonds for a living don't know next month's number either.

What actually matters is smaller than the rate: whether the building is right, whether the payment works at today's number with room to spare, and whether waiting a month costs you the property. A borrower who passes on a good building to save a fraction of a point usually pays for that decision in rent. If you're within a few weeks of closing, the rate you'll get is the next sale's, and we'll tell you the day it prints.

For anything beyond that, talk to your accountant or advisor. We'll give you the mechanics and the history; the timing call is yours.

What your payment would be

The calculator carries this month's rate already. Put in your project and see both payments, your blended rate across the bank loan and the SBA loan, and the same building on a conventional mortgage.

Questions

This page is for general informational purposes only and does not constitute legal, tax, or financial advice. Rates are set at the monthly debenture sale and change monthly; the pricing date is shown beside every figure.