What Is the Current Interest Rate for SBA 504 Loans (November 2022)?

UPDATE: The current interest rate on SBA 504 loans is 6.53 percent on the 25-year, 6.45 percent on the 20-year, and 6.53 percent on the 10-year.

If you look back to January 2022, rates have doubled. In fact, rates are near the highs reached prior to and during the 2008 mortgage meltdown when interest rates on SBA 504 loans crested 7 percent.

We are in that territory. What does this mean?

We will leave the economic forecasting to the economists and financial experts. However, we can say that it is much more expensive to fund projects the Small Business Administration favors.

While this is unfortunate, try to keep some perspective. Back in the 1970s, when inflation was higher than it is now, interest rates were sky-high, much higher than they are now.

You may consider that rates for the last 30 to 40 years have been unusually low. Some would suggest that the Fed has prompted multiple asset bubbles because they have kept interest rates artificially low.

And if you remember, the ‘70s were when the real estate boom really took off. 

The 1970s were a time of inflation and real estate boom. The economy was booming and interest rates were high. This made it a perfect time to invest in real estate. Prices went up and people made a lot of money.

Real estate has been the best inflation hedge in our history. There is nothing to suggest it won’t continue being so.

In general, real estate has been a good inflation hedge. Over long periods of time, real estate values have tended to keep pace with inflation. This is because as prices go up, incomes also tend to rise, which supports higher prices for homes. 

In addition, the physical nature of real estate means that it is not subject to the same type of price volatility as other investments.

However, it is important to remember that past performance is no guarantee of future results.

You can find the historical interest rates for SBA 504 loans here. If you'd like to chat with an experienced commercial loan advisor about rates, the economic outlook, or any of your projects, please book a call.