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Interest Rates Drop Below Five Percent for Small Businesses Loans through Oakland County Business Finance Corp.

Public Date: 8/13/2010 12:00 AM
Contact: Steve Huber, Marketing and Communications Officer, Economic Development and Community Affairs
Phone Number: 248-858-1848

Waterford, Michigan -- The Oakland County Business Finance Corporation is offering long-term, fixed rate financing for the purchase of commercial real estate at one of the lowest rates since the program began through the Small Business Association (SBA).

The SBA’s lending partners, Certified Development Companies (CDCs) are busy working with small business borrowers who are taking advantage of this current low interest rate to purchase or build new facilities. Oakland County Executive L. Brooks Patterson said there may not be a better time for small businesses to get these historically low rates.

"A commercial loan below five percent is an incredible rate for a 20-year, fixed rate loan," Patterson said. "When you consider the drop in the price of commercial real estate and the inventory on the market now, small businesses have a wonderful opportunity to expand or buy their first building."

"I urge any business owner thinking about expanding to call their banker and ask about the SBA 504 program today. Our Business Finance Corp. is working aggressively with our bank partners, and we have money available for sound, small business real estate projects."

NADCO, the trade association for the nation's Certified Development Companies (CDCs), reports that the interest rate for a 20-year SBA 504 loan continued to fall to a low of 4.93 percent this month. The August bond sale to investors that funded SBA loans was sold at a rate of 3.52 percent. This low sale price resulted in an effective interest rate - including fees – of only 4.93 percent for borrowers this month. This interest rate is one of the lowest since the program began in 1986.

The Small Business Administration's 504 loan program provides long-term, fixed rate financing for commercial real estate, and has funded nearly $60 billion in loans to growing small businesses over the past 24 years.  Not only are the interest rates low right now, but one best aspects of an SBA 504 loan is the low down payment required by a borrower.  The down payment is typically only 10 percent. CDCs across the country are busy helping small business borrowers who are taking advantage of these record low interest rates to purchase, build or expand their own facilities.

Recent loan data has shown that a large percentage of SBA 504 borrowers are professional practices.  The greatest concentration of loans has been to physicians, dentists, veterinarians, lawyers and accountants.  

"It's not surprising that accountants and lawyers recognize the benefits of SBA 504 loans, but 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," said Chris Crawford, NADCO president.  "More business owners would be wise to make similar investments."

For more information, please contact Cathy Rasegan at 248-858-5101.