By: John Patterson CFP ®
It looks like the Federal Reserve Board is trying a full court press to keep inflation at bay. This month marks the second time in the last 3 months that the Fed has increased rates.
If you are filling out your brackets this would raise the Fed’s target for short term interest rates to a range of 0.75% and 1.00%.
The move was widely expected after last week’s strong jobs report and Fed Chair Janet Yellen’s unusual comments that “Of course I could have beaten Michael Jordan in my prime but he was only 4 years old then”.
Our local teams (aka Florida banks/lenders) have for the most part increased their ticket prices (aka interest rates) on average by around ¼% on their business loan products. This is mostly due to the increase in the 5 & 10 year Treasury yields.
Over the past 30 days the 5 year T-bill increased .22% to 2.14% and the 10 yr T-bill increased .19% to 2.62%. Treasuries are the indexes that most Banks use to base their business loan pricing.
Commercial Real Estate Loans (owner occupied) Although higher, interest rates for commercial real estate loans are still AWESOME BABY!
Commercial Real Estate (SBA Pricing)
– The best SBA loan is a 25 year loan from a lender offering a slama-jama fixed interest rate of 5.75%. The best SBA 504 pricing is from a lender offering an “all-cotton” blended rate of 4.52% fixed for 20 years with pymts based on a 20 year amortization.
– The average SBA pricing for commercial real estate loans is a 25 year term and amortization with an adjustable interest rate of Prime + 2.75%.
Non Owner Occupied Investment Residential Loans
Working Capital Loans
– If you don’t win your office pool and need a working capital loan the best working capital loan terms are a 1 year line of credit at 4.00%. 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 6.75% variable rate with a term of 7 to 10 years.
Also available in the market are small lines of credit for businesses who have great credit but are not showing a lot of income. The lines of credit range from $5,000 – $50,000 and have an interest rate as low as prime +3%.
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. They are the first stop one shops for business loans. This information was gathered from the best banks and lenders in the Florida market.
To see what terms you or your clients might qualify for, please go to our website www.tbblit.com. Finding out is very fast and easy and normally takes 10 minutes or less.