In conjunction with the U.S. Small Business Administration, Florida First Capital offers the 504 Loan Program, providing long-term financing for:

• Acquiring land and buildings
  
• Construction, modernization, expansion or renovation of existing facilities
  
• Purchase of equipment and machinery

Typically, Florida First Capital provides financing at a fixed, long-term rate for 40 percent of a project. A local bank finances 50 percent of the project, and the borrower is responsible for a 10 percent down payment. The SBA portion of the total project cost should not to exceed $1.5 million. Minority-owned companies or companies located in rural communities may qualify for up to $2.0 million in SBA funds.

What can the loan be used for?

• Real estate acquisition, construction, rehabilitation or expansion
  
• Purchase and installation of machinery and equipment with a useful life of at least 10 years
  
• Payment of “soft assets,” such as construction period interest, professional and program fees, etc.

What are the advantages?

• Interest rates on 504 loans are generally below those offered by conventional banks. Maturities of 10 and 20 years are available.
• Low down-payment requirements help preserve working capital.
• Loans are assumable by qualified, acquiring businesses.
• Fees and other up-front costs and expenses may be financed with the loan.
• The assets being financed are typically used as collateral. Personal guaranties of the principal owners are also required.
• Loans are offered by the SBA, the nation's largest single financial backer of small businesses.
• The program offers additional benefits for women-, veteran- and minority-owned companies as well as businesses in rural communities.

How are loans structured?

• Private lenders provide 50 percent of the project financing and receive a first mortgage on 100 percent of the assets. Through the 504 program, the SBA finances up to 40 percent of the project with the borrower providing as little as 10 percent. Extended loan terms are available, using an amortization of 20 years for real estate and 10 years for equipment.
• The assets being financed are typically used as collateral. Personal guaranties of the principal owners are also required.
• The 504 loan will have a 10- or 20- year term depending on the useful life of the assets financed.
  

What businesses are eligible?

• Projects located in Florida
  
• For-profit businesses
  
• Projects that create or retain jobs
• Net worth below $8.5 million
• Two-year average after tax annual profits cannot exceed $3 million
• Credit-worthy small businesses
• Bank financing unavailable on same terms

Are there other requirements?

• An applicant purchasing existing commercial real estate must occupy a minimum 51% of the building space
• An applicant constructing commercial real estate must plan to occupy at least 60% of the building space
• Loans may not be used for working capital or inventory, or to refinance existing debt, except to replace funds spent on the project in anticipation of the loan
• Projects also must create or retain one job for every $50,000 or $100,000 of SBA funding, depending on project type.