504 Loan Prepayments

Prepayment of 504 accounts are different than other financing due to the use of a debenture to originally fund the loan. The following is an overview of the prepayment process:

  • The prepayment semi-annual dates are scheduled twice yearly for each 504 loan and are based on the date of the original loan funding
  • Prepayment calculations will include all payments up to and including the one due for the semi-annual date. All deferred catch-up plan payments, overdue payments, late fees and any other costs or fees incurred will be included
  • Prepayments can only be scheduled for the third Thursday of each month. 15 days advance notice must be provided so that the prepayment date can be scheduled
  • Prepayment premiums will be incurred on all 504 loans prepaid prior to the half-life of the loan (10 years on loan having a 20 year maturity and 5 years on a 10 year maturity 504 debenture)
  • A prepayment estimate will be provided to you soon after the prepayment date has been established
  • A non-refundable Good Faith Deposit of $1,000 must be wired using the wiring instructions below
  • The Good Faith Deposit must be wired not less than 10 days prior to the scheduled prepayment date
  • Colson Services Corp., the Central Servicing Agent, will then provide the actual prepayment amount, usually about six (6) days prior to the scheduled prepayment date
  • The actual prepayment amount must be wired not later than noon on the scheduled prepayment date, using the wire instructions below