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504 Loan Blog

All-time Low Interest Rate For 504 Loans
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I’ve been trumpeting it for a long time, and now you have even more evidence: there are once-in-a-generation opportunities to create wealth in these “interesting” economic times for business owners who are smart enough to recognize them and take action.

This month, the 20-year fixed interest rate on SBA 504 loan projects fell to 5.24% — the lowest in the 22-year history of the program. This news comes on the heels of fee reductions included in the Stimulus Bill and the announcement that the SBA would ease restrictions on using 504 loan funds for the purposes of refinancing. I firmly believe that the 504 loans are the single most powerful tool for owners of small and mid-sized businesses who want to truly create wealth and increase their net worth. These recent developments only sweeten the deal.

The vast majority of Americans remain glued to their TV sets, and are therefore too scared-stiff by the nightly news to take any real action and actually contribute to our nation’s economic recovery. The doom-and-gloom reports have everyone hunkering down, waiting for “the end.” You and I, acting as contrarians, must do everything we can to 1) capitalize on the opportunities that exist all around us, and 2) help others recognize that all is not lost.

There IS a crisis of credit in the financial markets, but we (Mercantile Capital Corporation) are still lending. Loans are still getting approved, deals are still getting closed, and businesses continue to earn profits . . . even during this changing economy.

What do you think about all this? What advice or encouragement would you give to other business owners during these interesting times?


  1. Braudis Lee Pegram says:

    Chris, I agree with you. And yes, there IS a credit crisis: acknowledging it and succumbing to it are totally two different things. Many Americans, including those who populate many banks, out of fear, have done the latter.

    There ARE opportunites all around us. Wealth can be created, even now. The wealthy know that because this “recession/depression” has happened before, and they know how to capitalize on it. They would not be able to have the mindset to take advantage if all they saw in the situation was doom-and-gloom.

    What I think that businessmen at large and people in general should do is to approach the existing condition the same as they did any condition when they were toddlers (yes, toddlers). Don’t overthink the situation (planning and overthinking are not the same thing): DECIDE what you want to make happen and start from where you are. If your current ability will only propogate and sustain baby steps, then make the baby steps. Learn and change as you go. Learn and change as you do. Babies do, and they don’t stay babies for long; and neither do the steps.

    “Prosperity belongs to those who learn new things the fastest.” — Paul Zane Pilzer: Economist, entrepreneur, and author. I say prosperity belongs to those who learn new things, period.

  2. Bob Gintoft, SIOR, EDP says:

    Hey Chris,
    Is the 504 Program really only 22 years old? I remember training for pacvkaging those loans with the National Development Council’s Economic Development Professional (EDP) designation after complewting 5 seminars. And I hate to admit it but that was back in the late ’70s and early ’80s.
    Keep up your good work! We need all the financing ppossible to loosen up the conventional lenders here in Milwaukee!

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