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Key Takeaways
There’s big news for businesses looking to grow in New York: We have secured a mortgage recording tax waiver for SBA 504 loans. This means that New York-based borrowers no longer have to choose between best-in-class service and unparalleled affordability—they can finally have both.
"This waiver is a game changer for the SBA 504 program in New York," says RBAC CEO William Pazmino. "When businesses can save on the mortgage recording tax, commercial real estate ownership and fixed asset purchases are significantly more affordable and within reach. We’re building on our existing lending presence in New York and using this opportunity to increase access to affordable small business funding in the region.”
What is the mortgage recording tax?
The mortgage recording tax is a one-time fee paid at closing when recording a mortgage with the NY county. It doesn't impact monthly payments, but borrowers must pay this tax upfront, increasing the cash needed for a commercial real estate loan. In places like New York City, where the tax rate hits as high as 2.8% in the five boroughs, that cost adds up fast.
The waiver applies to the SBA portion of the 504 loan, which includes both the interim loan and the 504 debenture. Businesses still pay the tax on the bank portion of the loan, but the savings on the RBAC piece means real money stays in the business.
The numbers tell the story
Let's walk through what the savings look like in practice. Picture a business purchasing a $2.5 million property in Brooklyn:
- Bank loan: $1.25 million (50%)
- SBA 504 loan: $1 million (40%)
- Down payment: $250,000 (10%)
Using Brooklyn's 2.8% mortgage recording tax rate, that business is saving $28,000 on SBA portion of the loan.
Now think about what $28,000 means. That's funding for a technology upgrade, an inventory restock, or a new hire. Critically, it's less cash needed at closing, which equals healthier working capital on day one.
"The elimination of the mortgage recording tax on the 504 loan allows businesses to keep the operating capital they need for growth," William explains. "More people will have the ability to trade renting their location for property ownership. Underserved industries like hotels and restaurants, where banks are hesitant to lend conventionally, will have increased access to financing. The 504 program reduces lender risk, making these deals possible."
What this changes for New York-based businesses
Businesses can now access RBAC's responsive, personalized service for 504 loans without the pricing penalty that previously existed. And the bigger the project, the bigger the savings.
For financial professionals that work with businesses in New York—including bankers, loan brokers, and business advisors—this changes the game too. We know you value providing choices to your clients, and the mortgage recording tax savings makes the 504 program a compelling financing option when compared to conventional loans and even SBA 7(a).
For us, it’s about giving everyone involved in making a loan happen better tools to work with.
Delivering on our mission to serve small businesses
Our new ability to provide mortgage recording tax savings is part of our broader mission to remove barriers for small business growth. Increasing affordable financing options for businesses in New York is a major focus for our team in 2026 and beyond.
The 504 program has always been a powerful key that unlocks commercial real estate ownership. Now that key will be even easier to use.
Curious to explore how affordable an SBA 504 can be? Contact us or your favorite RBAC team member to run through the numbers. We can’t wait to bring real savings to even more businesses in New York.
