SBA 504 LOAN > DESCRIPTION > SMALL BUSINESSES

You may not realize it but the Small Business Administration’s (SBA) 504 Loan Program is perhaps the best kept secret for commercial fixed asset financing today.

The 504 loan program is designed to help small business owners acquire fixed assets – commercial real estate and/or long-life machinery and equipment – without the financial hassles and high cash outlay requirements often associated with conventional financing programs.

Loan Structure

The key to the 504 loan program is its distributed credit structure: a commercial bank provides financing for 50% of the project and takes a first lien position; FFCFC provides 40% of the project financing (SBA portion) and takes a second lien position; and the small business owner provides a down payment of just 10%.

Program Benefits

  • Up to 90% financing at below-market, true fixed interest rates with amortization terms up to 20 years.
  • Loan amounts up to $5 million for standard and public policy projects and $5.5 million for manufacturing and green initiative projects (SBA amounts only; no limit on overall project dollar size)
  • Debt refinancing to be used for refinancing of qualified existing debt without business expansion (temporary program; expires Sept. 27, 2012).
  • Many 504 loans can be completed in 60 days, which is just as fast as a conventional loan.
  • Pre-approval can occur within 24 to 48 hours, with commitments in days, not weeks.

Qualification Criteria

  • Must be a U.S. citizen and the project must be for-profit and located in Florida.
  • Businesses with a maximum tangible net worth of not more than $15 million and average net income after Federal income taxes (excluding carry-over losses) for the two full fiscal years prior to application of not more than $5 million are eligible for 504 financing.
  • Must occupy a majority of the commercial real estate space.

The 504 loan program allows small business owners to enjoy better cash flow as well as the greatest cash-on-cash returns that exist in the commercial mortgage industry.  Contact Florida First Capital today for a fast and free pre qualification.