Why are different rates quoted for SBA 504 loans?
CDC Small Business Finance quotes the industry standard effective rate as published by the National Association of Development Companies on a monthly basis. This rate represents the average rate the small business borrower pays over the twenty year period of the loan. Since rates are reset every five years a borrower may pay four unique interest rates over the 20 year term of the loan. These rates are averaged to provide the effective rate. Be sure to verify that the rate you are being quoted is the “effective rate” as recognized by the 504 industry.
