SBA offering loans at lowest interest rate since 1986

In an effort to help entrepreneurs and potential small business owners, the U.S. Small Business Administration has announced that it will be offering long-term, fixed-rate financing at one of its lowest rates ever through its 504 loan program.

The interest rate fell to 4.93 percent for the 20-year loan program, which aims to support the purchase or building of commercial real estate. Jean Wojtowicz, chair of NADCO, called the rate “incredible,” especially in light of the current drop in real estate prices.

Additionally, the terms of the 504 loan program require only a 10-percent down payment from borrowers. Recent data has shown that a large percentage of those who have taken advantage of the loans so far have been physicians, dentists, veterinarians, lawyers and accountants.

Chris Crawford, NADCO president, did not find it surprising that accountants and lawyers had taken advantage of the loans. However, he said, “It's gratifying to see so many professionals also realizing that owning their own building to fix their business occupancy costs is a very savvy financial move. More business owners would be wise to make similar investments."

The SBA has also been partnering with microlenders to offer small, short-term loans up to $35,000 to startup, newly established or growing small businesses, the Wall Street Journal reports. Borrowers are then able to invest that money for working capital or in inventory and equipment purchases.