SBA 504 Refinance Loan Offers Monumental Opportunity to Create Working Capital
Monument Road Tire & Service is a full service tire and auto repair shop located in Jacksonville Florida. By providing top quality service for all vehicle makes and models for over 38 years, owner Arthur Preston has developed a devoted following of loyal customers that return again and again for all of their maintenance needs.
Based in a 6,143 square-foot building that was constructed in 1985 and purchased in 2009 with a variable interest rate mortgage held by the seller, Preston was looking to refinance the existing debt and also obtain some working capital in the process.
Preston worked with Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida, and utilized the Small Business Administration (SBA) 504 Debt Refinancing Program to secure a significantly lower fixed interest rate, resulting in an annual mortgage payment savings of $13,654. Preston also opted for the cash-out option and secured $150,000 for working capital needs to cover eligible business and operating expenses.
Under the 504 Debt Refinancing Program, small businesses can take advantage of below-Prime, fixed interest rate refinancing with repayment terms up to 25 years for up to 90% of the appraised value of commercial real estate property (no cash out). Eligible fixed assets include land, buildings, machinery and equipment that were acquired, constructed or improved by a small business for use in its business operations.
Borrowers can also refinance eligible business operating expenses (cash-out option), however a maximum 85% LTV applies and the business operating expenses portion of the project may not exceed 20% of the value of the eligible fixed asset(s) securing the qualified debt.
Eligible business operating expenses include any other expenses of the business that are not capital expenditures (e.g., salaries, rent, utilities, inventory, etc.) that were incurred but not paid prior to the date of the refinance application or that will become due for payment within 18 months after the date of application.
504 refinancing costs may also be included in the loan. Existing 504 loans and other government guaranteed loans are not eligible.
Click here for complete details about the SBA 504 Debt Refinancing Program.
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@FloridaFirst.com. Phone: 850.681.3601 or toll-free at 800.504.LOAN.