Current Borrowers FAQ
Your amortization schedule will provide accurate information regarding interest and fees as long as payments are paid in a timely manner. Also, you can request, after January 31, itemized interest and fees paid for the prior year.
Prepayments on SBA 504 loans are only accepted on the 3rd Thursday of each month. Empire State CDC needs at least 15 days advance written notice from the borrower. Please provide a letter to Empire State CDC with the following items:
- Month and date the loan is to be paid off (a 3rd Thursday)
- SBA loan number(s) and property address
- Your contact information, including phone number, email address and/or fax number
Yes, but there is a pre-payment premium for the first 10 years of your loan. You can minimize the interest due by pre-paying your loan the month before your semi-annual date. Wire is the only acceptable way to prepay.
Generally, your first trust deed loan from a bank or other lender has a higher interest rate than the SBA 504 loan. If you decide to refinance this first mortgage, CDC will subordinate your SBA loan to a straight refinance of your first trust deed loan. Cash-out may be allowed if the proceeds are used for building improvements.
Loans are not assumable, but can be assumed if a buyer is a qualified buyer and meets eligibility requirements as if it is a new loan, which will be subject to approval by Empire State CDC and the U.S. Small Business Administration. Prepayment penalty does not apply in this instance.
Your payment includes fees being paid to SBA, Central Servicing Agent and Empire State CDC (that’s us). These fees are adjusted downward at 5-year intervals.
The rate on the loan is determined approximately one week prior to the date the loan is funded and is based on current market conditions, which fluctuate. Typically they follow the trends of treasury rates. The loan is pooled with all of the other 504 loans funded in the same month and sold in the form of debentures.
Your loan can be assigned to the new lender when paying off your 504 loan. There is a fee associated with this and per SBA rules; Empire State CDC will hold the assignment in escrow until the money has been received. Please contact a member of the servicing department for the fee.