Well, it is not quite as stark as the example above, but it is an interesting option for businesses that seek financing from the SBA 504 Program. In the future, applicants could opt for an option to improve their cash flow by extending the terms of their financing out to 25 years.
Speaking this week at the NADCO Spring Summit in Washington, D.C., SBA Administrator Linda McMahon affirmed SBA’s support for a twenty-five year 504 debenture. The longer term debenture could be offered as soon as FY2018. The Administrator pointed out the benefits of long term fixed rate financing in a rising rate environment, which do seem to make a persuasive argument for small business borrowers.