If you work with or operate a manufacturing business classified under NAICS 31 through 33, the SBA 504 loan program is currently one of the most cost effective options available for long term, fixed rate financing. Limited time incentives are making it even more attractive for manufacturers planning a purchase, expansion, or equipment investment.
Upfront SBA Fees Are Being Waived for Small Manufacturers
The SBA’s upfront guaranty fee of 0.5 percent is currently being waived for qualifying small manufacturers. On a $5 million SBA 504 loan, that waiver alone results in savings of $25,000, money that can go straight back into the business rather than toward closing costs.
The SBA Is Also Reducing Interest Rates for Manufacturers
Beyond the fee waiver, manufacturers also have access to a reduced interest rate on the 504 program.
- Standard SBA 504 (25 year fixed): 5.95 percent
- Manufacturer SBA 504 (25 year fixed): 5.71 percent
On a $5 million loan, that rate difference would save a manufacturer $218,000 over the life of the loan. Combined with the fee waiver, these incentives meaningfully lower the cost of long term financing at a time when access to affordable capital matters most.
Why This Matters for Manufacturers Right Now
These are limited time incentives, which makes timing important for manufacturers considering a facility purchase, expansion, or major equipment investment. The SBA 504 program is built around long term, fixed rate financing designed for exactly these kinds of projects, and the added savings on fees and rates make it especially attractive while they last. You can learn more about how the program works directly from the U.S. Small Business Administration.
What Manufacturers Should Do Next
If you or your clients are considering a manufacturing project, now is the time to talk through the numbers. NEDCO can help improve cash flow through lower fees, reduced rates, and long term fixed financing built around your project.
Contact NEDCO today to discuss how these incentives could apply to your next manufacturing project.
Frequently Asked Questions
Who qualifies for the manufacturer rate reduction? Businesses classified under NAICS codes 31 through 33 that meet SBA size and eligibility requirements for the 504 program.
How long will these incentives last? These are limited time incentives, so manufacturers considering a project should reach out soon to confirm current terms.
What can the savings be used for? The fee waiver and rate reduction lower the overall cost of financing, freeing up cash flow for other business needs.