I Fought the Law and the Loan Died
January 4, 2016
Fun times coming to Sebastian Florida
January 19, 2016
Pressure on raising commercial loan rates have begun to cause some South Florida Lenders to push up the cost of lending. The most obvious rise in interest rates can be seen in the business loan products that have a variable rate and are tied to the Wall Street Journal Prime Rate which increased last month to 3.5%. This was caused by the Fed raising the overnight federal fund rate by 0.25%.
Business loan products with fixed term interest rates of 5 to 10 years for the most part are holding steady although a few lenders in our area have also increased their rates by ¼ %. These loan products are usually tied to the 5 or 10 year treasury rates which has remained for the most part stable.
Some area banks seem to have more aggressive loan goals for this year. A good thing for local businesses seeking financing. One large bank in our area reported annual loan production goals have doubled in 2016 for their business loan officers.
Commercial Real Estate (owner occupied)
Very strong competition among area banks is keeping these interest rates very low. In addition some Banks are running specials where they will help pay part of a borrower’s standard loan fees.
– Best loan right now is a 15 year fixed Term/AM loan being offered at 4.25%. There is a 5 year prepayment penalty but overall this is the best deal we could find in our area.
– Average pricing from top tier lenders is a 10 year term loan with 5 years fixed rates anywhere from 4.75% to 5%. Amortization on these loans can go up to 20 years.
Commercial Real Estate (SBA Pricing)
Pricing on SBA commercial real estate loans seemed to have increased somewhat slightly.
– The best SBA loan is a 25 yr term/AM loan being offered at 5.5% fixed.
– The best pricing on an SBA 7a loan variable rate loan is currently a 25 yr term/AM loan offered at rate of 5%. The average SBA 7a loan is a 25 yr term/AM loan being offered at a variable rate of 6.25 % (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 3.5%. 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 most SBA lenders are going to be at a 6.25% 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 free 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.
