Ever Wonder Who Sets the Interest Rates for the SBA 504 Program? 

Every month since 1986, SBA 504 loans from around the country have been pooled for purchase by the 504 Loan Program underwriters, with the pool of loans ultimately sold to investors. A key participant in the funding process is the Fiscal Agent, who is responsible for representing the SBA, Certified Development Companies, and borrowers, when obtaining the best available interest rate. The Fiscal Agent since 2012 is Mr. Frank Keane, President and CEO of Eagle Compliance, LLC.

Frank Keane – SBA 504 Loan Program Fiscal Agent

As the Fiscal Agent, Mr. Keane’s duties include:

  • Managing the administration of the monthly issuance of the debenture pools
  • Organizing the marketing and underwriting of the debentures
  • Negotiating the pricing of the monthly debenture pool sales with the underwriters: Bank of America Merrill Lynch and Credit Suisse
  • Confirming proceeds of the sale for distribution to the Central Servicing Agent, Wells Fargo Corporate Trust Services
  • Providing advice to the SBA Office of Financial Assistance on market conditions and the financing of 504 debenture pools, and performing industry research and analysis

The SBA 504 Loan Program has a fixed funding calendar that, as Fiscal Agent, Mr. Keane must follow. The process starts on a Friday when the SBA determines the size of the monthly loan pool. The following Monday, after discussion with the underwriters on market conditions, there is what is called “whisper talk” with potential investors, to gauge whether the suggested rates would trigger a potential debenture purchase. An official announcement regarding pricing is made on Tuesday. The rates are then officially set that Thursday, and debentures are sold to the underwriters the following week.

Mr. Keane has 30+ years’ experience in capital markets trading, risk management, and regulatory compliance. A former director at Merrill Lynch GSI and Managing Director at Banc of America Securities, he also was responsible for underwriting and trading the program’s debt securities for 13 years while at Merrill Lynch.

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