Prepayment Information

SBA 504 loan funds come from the sale of debentures to private investors. Although borrowers make monthly loan payments, the debenture payments are paid semi-annually to investors. Borrowers are required to pay a prepayment premium upon prepayment of their loan anytime during the first half of their loan term. This prepayment premium decreases over time.

A borrower may prepay the 504 loan by paying the entire principal balance, unpaid interest, any unpaid fees and any prepayment premium established in the note. Partial prepayments are not accepted.

The borrower must provide MCFC with 30 days written notice that the loan will be prepaid. At that time, MCFC will provide the borrower with additional instructions and pay off deadlines.

Prepayments must take place on the third Thursday of the month and funds must be in the form of a wire transfer to Colson Services.

Please note the SBA 504 loans are assumable, depending upon qualification. This would eliminate the need to pay the prepayment premium.
We encourage you to contact our office if you would like a loan prepayment estimate, need to schedule a prepayment or discuss loan assumption options.