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504 Rate Update

504 June Rates

5.062% – 20 Year Debenture Effective Rate *

Sturm und Drang

Interest rates can and do, sometimes, go up. Sometimes they even do so precipitously.

Consider the chart below (Source: The Financial Times), showing the movements of the German Ten Year Government Bond over the past few months.

German Bond

This is the Germans we are talking about: the veritable and venerable staid Burghers of Fiscal Probity. Bustin’ a move to some ninety-odd basis points upside in under two months. Not to be outdone, the US Treasury Ten Year Note has moved some forty basis points over the same period.

Borrowers notice things like this. When Borrowers have adjustable rate loans, Bankers eventually notice this as stress tests become real life experience.

Which brings us to long term fixed rates of the SBA 504 Program. In a rising rate environment, fixed rates have a very strong appeal, whether to Borrowers struggling to make payments or to Bankers struggling to collect them.

2015 May

Chart and Statistical Data is from May 2006 to June 2015

Debenture Rate 10 Year T-Note
Spread Over T-Note
June 2015
2.44% 0.54%
3.03% 0.85%
2.94% 0.66%
0.009530724 0.005938425

Regular stress tests are supposed to be applied to your loan portfolio, not to your psyche. Take some stress out of your life with the fixed rate financing options of the SBA 504 program.

We welcome the opportunity to earn your business

* Note: Rates are subject to credit determination & auction pricing. Past performance is no guarantee of future results.

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South Central Tennessee Development
101 Sam Watkins Blvd.
Mount Pleasant, TN 38474
Office (931) 379-2918
Fax (931) 379-2640

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