Commercial Real Estate Financing. Machinery & Equipment Financing. Low Down Payments.
The Small Business Administration (SBA) 504 Loan Program offered through Florida First Capital provides available and affordable long-term capital for the purchase of major fixed assets, such as owner-occupied commercial real estate and/or heavy duty machinery and equipment, without the high down payment requirements often associated with conventional financing programs.
Loan Structure & Down Payment Schedule
The 504 Loan Program is a partnership program between Florida First Capital, which is a nonprofit SBA Certified Development Company, and a commercial lender. Working with participating lenders, Florida First Capital provides up to 90% financing at below-market, fixed interest rates and long amortization terms for eligible fixed asset purchases.
Typically, a commercial lender provides financing for 50% of the 504 loan project and takes a first lien position; Florida First Capital/SBA provides 40% of the project financing and takes a second lien position; and the borrower provides a down payment of just 10%.
If a project is a start-up business (less than two years in operation) or a special purpose facility, the borrower’s down payment increases to 15%. If a project is a special purpose facility and a start-up business, the borrower’s down payment increases to 20%.
Machinery and equipment only loans may qualify with a 10% or 15% borrower down payment.
- The business must fall within the size standards set by the SBA.
- Owners must be U.S. citizens or registered aliens with green card.
- The business must be operated for profit and be located in or planning to locate in Florida.
- The business must be a legal entity: corporation, partnership, sole proprietor or limited liability company.
- The business’s tangible net worth cannot exceed $15 million.
- The business’s average net income after Federal income taxes (excluding carry-over losses) for the two full fiscal years prior to application cannot exceed $5 million.
- Loans cannot be made to businesses engaged in speculation or investment in rental real estate.