Most people know that the SBA 504 Loan Program is great for purchasing land or buildings and even for new construction. Did you also know that 504 Loans are perfect for purchasing equipment?
This Saturday, November 26th, is Small Business Saturday. In an interview on The Today Show, SBA Administrator Maria Contreras-Sweet encouraged everyone to "shop small and dine small this Saturday." Positioned between Black Friday and Cyber Monday, Small Business Saturday allows us to use our holiday shopping dollars to recognize the importance of small businesses and the contributions they make to our communities and our country's economy.
Another myth about the SBA 504 Loan Program is that the prepayment penalty is much higher than for conventional loans. This is not true, as the prepayment penalty is based on the loan's debenture rate and not the effective rate. We will explain the difference, as many borrowers are confused as to how the prepayment penalty is calculated. First, however, we want to address why the 504 Loan has a prepayment penalty.