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Fixed-rate repayment for SBA 504 small business loans extended to 25 years
Small business owners can now have 25 years to repay loans they receive from the U.S. Small Business Administration (SBA) 504 loan program. SBA 504 loans help small companies gain favorable financing terms similar to those available to large companies in conventional loans.

The Indiana Statewide Certified Development Corporation announced that the SBA published a notice in the Federal Register Wednesday (April 4). The SBA says that it is making the 25-year fixed-rate repayment option available immediately for SBA 504 projects approved on or after April 2.

SBA 504 loans currently offer 10-and-20-year repayment schedules with an interest rate that is fixed at the loan’s outset and is not affected if interest rates rise later.

Indiana Statewide CDC works with local Indiana lenders to issue SBA 504 loans to help owners of expanding or startup small businesses buy real estate, buildings and equipment.

Jean Wojtowicz, executive director of Indiana Statewide CDC, the state’s most active SBA certified 504 lender, says, “Fixed interest rates are a very important benefit for small business owners using the 504 loan program. In this environment — in which interest rates are likely to increase over the years — a longer fixed rate repayment schedule will be even more important for a small business owner.”

She says, “The fixed-rates allow a small business owner to place a consistent repayment figure in his or her monthly budget. That monthly payment can be slightly lower on a 25-year schedule, freeing up more cash for day-to-day expenses.

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