December 2018
Commercial Lending
Resolutions for SBA 504 Lenders in the New Year

With 2019 just around the corner, the New Year is a great opportunity for commercial lenders to boost their lending portfolios while providing available and below-market capital to small businesses growing and expanding their operations through fixed asset purchases like owner-occupied commercial real estate and heavy duty machinery and equipment, all while reducing lending exposure.

New Year’s Resolutions for SBA 504 LendersWhile you’re considering life changing resolutions for the New Year, resolve to partner with Florida First Capital to offer the Small Business Administration (SBA) 504 Loan Program and increase your small business lending efforts in 2019!

Life Resolution: Get Trim

504 Resolution: Cut portfolio fat with low loan-to-value ratio 504 loans.  Florida First Capital provides SBA backed second mortgage financing up to 40% of the project cost, thus conserving liquidity and helping to manage lending limits and industry exposure.  The lending institution gets a 50% loan-to-value first lien position on the assets being purchased – cutting risk tremendously.  And for added security, our commercial lending partners can utilize the 504 Bridge Loan Program to cover all or part of the SBA second mortgage during the interim period of the 504 project until the permanent SBA second mortgage takeout occurs.

Life Resolution: Save Money

504 Resolution: The SBA 504 Loan Program provides small business borrowers up to 90% financing at below-market, fixed interest rates and long amortization terms for the purchase of major fixed assets, such as owner-occupied commercial real estate, energy efficient “green” initiative projects and/or heavy duty fixed machinery and equipment.  With the low down payment option, borrowers can preserve valuable working capital for subsequent expenses.  And with effective fixed interest rates below Prime, your clients will save substantial money over the repayment term, which ranges from 10 to 25 years, verses conventional financing,

Life Resolution: Get Out of Debt

504 Resolution: Small business owners can lighten their monthly debt payments and access equity trapped in commercial real estate holdings by refinancing conventional real estate loans through the SBA’s 504 Debt Refinancing Program.  Under the program, small businesses can take advantage of below-market, fixed interest rate refinancing with repayment terms up to 25 years for up to 90% of the appraised value of commercial real estate property, without the requirement of expansion, which was required in the past.  Borrowers may also refinance eligible business operating expenses (cash-out option).

Life Resolution: Expand Horizons

504 Resolution: Normally, borrowers are eligible for up to $5 million of aggregate SBA eligibility on standard and public policy 504 projects.  However, borrowers may be eligible for multiple SBA 2nd mortgages of up to $5.5 million per green friendly project under the 504 Green Loan Program; however, the outstanding gross debentures issued for a small business concern, including its affiliates, must not exceed $16.5 million in the aggregate.  These amounts are NOT reduced by any other outstanding SBA financing (7a, Community Advantage, regular 504).  Additionally, there is no limit on the amount of the 1st mortgage of a 504 project and therefore no maximum project size. In many cases, qualified borrowers with projects exceeding $20 million can still obtain up to 90% financing.

Life Resolution: Help Others

504 Resolution: The SBA 504 Loan Program makes affordable credit available to small business owners in Alabama, Florida and South Georgia.  Equally important, it is an investment in the backbone of the economy which creates small business jobs that help build and support local economies and communities.

Life Resolution: Spend More Time with Family and Friends

504 Resolution: Florida First Capital is the proven Certified Development Company expert to get your 504 deals done quickly and efficiently.  Our professional staff takes care of all the paperwork, answers your questions and works with you every step of the way, freeing up your valuable time.

Life Resolution: Get Organized

504 Resolution: When it’s time to close the deal, our 504 small business clients and commercial lending partners have exclusive access to a specialized network of local closing attorneys, which saves time and money with simultaneous closings for straight acquisition projects.

2019 can be a great year for your commercial lending institution.  And with the help of the SBA 504 Loan Program in partnership with Florida First Capital, you’ll find your lending risk diminishing and your portfolio increasing!

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