SBA 504 Debenture dates for the bondholder to be paid occur semiannually. You are responsible for your standard monthly payments which are escrowed until the semi-annual payment date arrives.
Regardless of what month you decide to payoff the 504 Note, you are required to make all monthly payments up to and including the month of your semi-annual Debenture payment date in order to have enough funds to payoff the note and debenture balance.
The best time to payoff your SBA 504 Note is the month before your semi annual Debenture payment date. The payoff balance must be wired on the 3rd Thursday of that month.
Along with payoff of the loan balance, there is also a prepayment premium in effect during the first 10 years of the 20 year 504 Loan (Note) or during the first 5 years of a 10 year 504 Loan, and that premium declines every six months from loan inception through year 10. This premium is included in the payoff balance of the loan, if applicable.
If you have any questions or require additional information, please contact us.