July 2019
Borrower Profile
SBA 504 Loan Helps Tile Retailer Achieve Balance with Long-Term Debt Refinancing

Rigo Tile Gallery is a well-known importer of Italian and Turkish Marble in the Central Florida flooring industry.  With two retail stores, the company has built a reputation over the last 20 years of providing the highest quality of products, selection and service at competitive prices.

Rigo Tile Gallery Orlando FloridaAs Rigo has grown, like any business the accumulation of debt can adversely affect the cash flow of a healthy operation.  In Rigo’s case, the company had multiple commercial real estate mortgages on its 32,919 square-foot retail/warehouse building with a sizable balloon payment looming that likely would negatively impact its continued growth.

Rigo decided to consolidate the existing mortgages into one program that would also allow for a more efficient structure to the company’s existing debt going forward.  Working with Florida First Capital and the Small Business Administration (SBA) 504 Debt Refinancing Program, the company was able to combine its existing real estate debt into one $3.2 million transaction with a below-market fixed interest rate (no ARMs) and a 20-year fully amortized term (no balloons).

“The refinance component of the SBA 504 Loan Program is a vital resource for small businesses looking to consolidate existing commercial real estate debt into a long-term, cost effective and predictable repayment schedule,” said John Hanrahan, Florida First Capital Vice President and Business Development for Central Florida.  “The added bonus with this program is the preservation of capital can serve a business well for future expansion.  Savings can range as high as 20% in monthly payments,” he said.

Under the SBA 504 Debt Refinancing 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 (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.