SBA 504 Benefits For Lenders

• Expands your bank’s business loan portfolio.
• Minimizes bank collateral risk.
• Puts your bank in a first lien position with an attractive loan-to-value.
• Allows your bank to make its own credit decisions with its own loan documentation.
• Allows your bank to set its own rates and fees.
• Saves your loan officers time (Florida First Capital works directly with the SBA 504 applicant).
• Enables your bank to sell the first mortgage at a premium.

Loan Structure

• Bank funds 50 percent, the 504 funds 40 percent, the business 10 percent equity. (Call FFCFC for start-ups or special purpose assets).
• The FFCFC reviews the SBA 504 credit analysis and forwards it to SBA for an Authorization.
• The project proceeds (a bank will typically need to provide a fully funded interim loan).
• When the project is finished, the FFCFC closes on the SBA 504 Loan.
• Two permanent loans are in place:
(a) A first mortgage conventional loan with a minimum term of 10 years for real estate, seven years for equipment.
(b) A second mortgage 504 Loan from the SBA. The term is 20 years for real estate, 10 years for equipment. The SBA 504 Loan rate is fixed with level debt payments.

Pricing

• Pricing is at the bank’s discretion.
• The bank will pay a half-point fee to SBA, which may be passed on to the borrower.