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Small businesses keep cutting back on borrowing for real estate and equipment purchases as interest rates rise and because of a change in a lending law.

There are 482 real estate and equipment loans whose funding is being completed during September, down 4.4 percent from 504 in August and 590 in July, according to the National Association of Development Companies. This month's reading is 20 percent below the 12-month average of 606 per month. The trade association represents nonprofit companies that are certified by the Small Business Administration to provide property loans.

The SBA-supported loans were made under what's called the 504 program, which provides loans for the purchase of real estate and equipment. The program was expanded following the recession to also allow refinancings, but the law that provided for refinancings expired a year ago. That has contributed to the drop in property loans to small businesses.

A bill is pending in the Senate to reinstate refinancings.

The development association also noted that interest rates have been rising the past four months, making loans more expensive. The 10-year Treasury note, used as a benchmark for loans including mortgages, is close to 3 percent. In May, it was less than 2 percent.


How do you price on your product or service? Get some answers during an online seminar held by SCORE, the organization that gives free counseling to small businesses. The seminar will be held Thursday, Sept. 26 at 1 p.m. ET. You can learn more and register at


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