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January 4, 2016
Commercial Loan Rates – South Florida 12/01/15
All quiet on the interest rate front heading into December. In November the five year Treasury started out the month at 1.57% and ended up at 1.64%. The ten year Treasury remained almost unchanged from 2.20% and ending the month at 2.22%.
These rate changes seemed to have had no effect on commercial loan rates which have remained unchanged at local area banks.
December however could be a big month as the Federal Reserve Bank meets on December 16th to talk about raising rates. A tight labor market which many believe is causing increased wages could be the catalyst to finally raise interest rates. If they do it will be the first time since June 2006 that rates have risen.
Now however loan pricing is still historically low.
Commercial Real Estate (owner occupied)
Very strong competition among area banks is keeping interest rates very low. In addition some Banks are now running specials where they will help pay part of a borrower’s standard loan fees.
– Best loan right now is still a 15 year fixed term/AM loan being offered at 3.99% fixed rate. As an added benefit the loan origination fee has been reduced to 0.25%.
– Average pricing from top tier lenders is a 10 year term loan with 5 years fixed rates anywhere from 4.5% to 5%. Amortization on these loans can go up to 20 years.
Commercial Real Estate (SBA Pricing)
Pricing on SBA commercial real estate loans seem to varying widely among area lenders.
– The best SBA 504 loan is a 20 yr term/AM loan being offered at 4.5% fixed. The average SBA 504 loan is a 20 yr term/AM loan being offered at a 7-10 year fixed rate in the low 5% range.
– The best pricing on an SBA 7a loan currently is a 25 yr term/AM loan offered at 4.9% fixed for 25 years. The average SBA 7a loan is a 25 yr term/AM loan being offered at a variable rate of 6% (WSJ Prime Rate +2.75%).
Machinery & Equipment Loans
Lenders are offering lots of options when it comes to how long you want your M&E loan to last?
– If you can handle a short term loan the strongest is a flat 3 year term/AM with a fixed rate of 3%. Average pricing from a good lender is going to be a 5 year term/AM with a fixed rate of 4.5%. If you need to go SBA the best pricing is currently a 10 year fixed rate at 5.5%.
Working Capital Loans
Assuming you are not looking for a 0% introductory rate credit card the best working capital loan terms are a 1 year line of credit at 3.75%.
– If you don’t want to be in a situation where you need to renew the loan every 12 months the best loan program is a 5 year term/AM with a fixed rate of 5.5%. If you need to go the SBA route a 10 year term/AM loan is available with a fixed rate of 5.5%. For most SBA lenders the rate is going to be a 6% variable rate with a term of 7 to 10 years.
The above pricing was provided by The Best Business Loans in Town which is a local on-line marketplace, using technology to dramatically simplify the execution of shopping for business loans.
This information was gathered from over 20+ local banks and lenders in the South East Florida market.
To see for free what terms you or your Clients could qualify for, please go to our website www.tbblit.com. Finding out is very fast and easy and normally takes 10 minutes or less.
