Commercial Loan Rate Survey – Florida

By: John Patterson CFP ®

Up, up and away. Unfortunately Cats & Kittens, interest rates have recently gone up and future rises in interest rates in 2017 looks probable.

The prime rate just rose ¼% and is now at 3.75%. In a little over a month the 5 & the 10 year T-Bills have increased close to ½% and are now at 2.07% and 2.6% respectively. Most of our banking partners reported increases in their best case pricing by 3/8% to ½% and only one reported a slight decrease in their best rates by 0.25%.

Commercial Real Estate (owner occupied) Historically, interest rates for commercial loans are still fantastic right now.
– Best loan right now is a 10 year fixed interest rate of 4.20% which is based on a 20 year amortization. Close behind is a different bank offering an interest rate 3.75% for a 5 year fixed rate loan also with a 20 year amortization.
– Average pricing from top tier lenders is a 10 year term loan with a 5 years fixed rate anywhere from 5.25% to 5.50%. Amortization on these loans can go up to 20 years.

Commercial Real Estate (SBA Pricing)

– The best SBA loan is a 25 year fixed loan with a fixed interest rate of 5.50%. There is also a 10 year fixed interest rate of 4.99% which is also based on a 25 year amortization.

– The best pricing on an SBA 7a loan variable rate loan currently is a 25 year term/AM loan offered an adjustable interest rate of 5.50%. The average SBA 7a loan is a 25 year term/AM loan being offered at a variable rate of 6.50 % (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 interest rate of 3%. Average pricing from a good lender is going to be a 5 year term/AM with a fixed interest rate of 4.5%. If you need to go SBA the best pricing is currently a 10 year fixed interest 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 3.75%. 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.

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.