July 2018
Borrower Profile
SBA 504 Bridge Loan Helps Construction Phase of ‘ZA Palace

Crispy’s of Jacksonville is regarded by many in the area as the place to go for the best ‘za in town.  Better known as pizza for the older generations, this local favorite came to life as the dream of entrepreneur John Crispens and with the help of the Small Business Administration (SBA) 504 Loan Program.

Crispy’s of JacksonvilleWith more than 17 years of management experience at some of the most venerable names in the family dining arena like Applebee’s and TGI Friday’s, Crispens has earned his stripes as an industry veteran.   Having purchased an 81-year-old former two-story department store building totaling 5,691 square feet back in 2014, Crispens was ready to begin the extensive renovations needed to convert the bare structure to the pizza haven it is today.  Those improvements would take 3 ½ years.

With a total cost of $575,000, Crispens worked with Florida First Capital and financed the project through the Small Business Administration (SBA) 504 Loan Program, allowing him to take full advantage of significant cost saving benefits offered by the program.  Key among these are a low down payment structure, below-market fixed interest rates and long amortization terms that keep out-of-pocket expenses low and enable the crucial preservation of working capital.

However, in order to secure interim financing of $201,250 needed for the lengthy renovations, Crispens and his commercial lending partner in the deal turned to a program offered by Florida First Capital known as the 504 Bridge Loan.

Under the SBA 504 Loan Program, commercial lenders partner with a certified development company like Florida First Capital to provide small business owners with up to 90% financing for the purchase of owner-occupied commercial real estate and/or fixed machinery and equipment.

Typically, a 504 loan is structured whereby a commercial lending partner finances 50% of the project and holds the first mortgage.  Florida First Capital/SBA finances 40% of the deal and holds the second mortgage.  The borrower provides a 10% down payment.

One of the most critical stages for a commercial lending partner in an SBA 504 loan project is the interim phase between the commercial lending partner’s closing and the permanent takeout of the second mortgage by the SBA, during which time the commercial lending partner is at risk on the second mortgage.

The 504 Bridge Loan Program addresses this exposure and timing difference by providing commercial lending partners with bridge loan funds to cover all or part of the second mortgage during the interim period of the project until the permanent SBA second mortgage offered through the 504 program takeout occurs.

“The 504 Bridge Loan Program is extremely useful for projects where construction plays such an important and often times lengthy role in the process and helps make for a smooth transition to permanent financing by alleviating interim risk for our commercial lending partners,” said Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida.  “Our lending partners and borrowers can both count on a seamless and efficient transaction from start to finish.”

See Also: 504 Bridge Loan Program FAQs

Visit Crispy’s online at: www.crispysspringfieldgallery.com.

For more information about SBA 504 loans in Alabama, Florida or South Georgia, contact a Florida First Capital Loan Officer or email us at info@ffcfc.com.  Phone: 850.681.3601 or toll-free at 800.504.LOAN.