CDC Small Business Finance announced today that all 504 loans approved after February 16, 2009, will be offered with significantly reduced loan fees. The Stimulus Plan completely eliminated the 0.50% SBA Fee charged on the first trust deed bank loan in a 504 loan structure. The plan also reduced the fees associated with the SBA piece of the structure from 2.15% of the loan amount to just 0.625%.

These changes will result in significant savings for commercial real estate buyers looking to finance purchases with SBA 504 loans. For example, consider a $2,000,000 purchase with just 10% down payment in Los Angeles, California. The SBA fees under the old plan would have totaled approximately $5,000 on the bank loan and $17,200 on the SBA loan. With changes announced today, using the same purchase price and down payment, the total SBA fees are reduced to just $5,000 (a savings of $17,200).

The new fee structure is expected to remain in place through the balance of 2009, but there is no guarantee. With respect to interest raters, the current SBA debenture rate is 5.60%. On the bank side, the 5 and 10-year fixed rates are 6.25% and 6.75%, respectively, resulting in a “blended” SBA 504 rate for owner-users of 5.96%.  SBA.