SBA 504 Loan Helps Keep Shipping Lanes Running Smoothly
Just sit right back and you’ll hear a tale, a tale of a fateful trip, that started from this tropic port, aboard this tiny ship. A cautionary tale to tell at the least. If only the Skipper and Gilligan had the services of a premier ocean towing organization, the story would have been much different! All kidding aside, the professionals at TradeWinds Towing LLC work very hard to keep shipping lanes moving.
TradeWinds, which is headquartered in St. Augustine, operates tugboats in coastwise and ocean towing. Most of their operations are within the Gulf of Mexico, U.S. East Coast, Caribbean and Central America. The brother and sister team of Dominique and Rachel Smith bring a collective 36 years of experience in the industry managing ocean tug and barge fleets, harbor tugs, liner services and salvage operations.
Since 2006, TradeWinds has seen steady growth in their market share as well as their fleet of tug boats, currently numbering 7. So when it came time to purchase a leased tug named HOLLYWOOD, the Smiths turned to a familiar source of financing for commercial marine vessels that they had past personal experience with – the Small Business Administration (SBA) 504 Loan program.
The Smiths previously worked with Florida First Capital in 2016 and obtained 2 separate 504 loans totaling $3.8 million for the purchase and overhaul of 2 other tugs in their fleet – the HANNAH and REBEKAH, both built in 1980.
For their current project, the Smiths obtained a $2.54 million 504 loan for the purchase and full refurbishment of the HOLLYWOOD, which was built in 1985. That tug will be relaunched as the CAITLYN and will be based in St. Augustine.
The versatility of the 504 Loan Program allows for these type of equipment assets to qualify for long-term SBA financing at below-market fixed interest rates and a low down payment of just 10%.
“The Smiths certainly found their lucky star navigating the mine field that can be commercial financing for marine vessels,” said Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida. “These type of transactions are a strong suit for our company and it’s a knowledge base that not many lending institutions can claim. At the end of the day, financing commercial marine vessels is no different than financing a commercial building under the 504 loan program” she said.
Visit Tradewinds Towing LLC online at www.tradewindstowing.com.
The SBA 504 Loan Program provides up to 90% financing at below-market, fixed interest rates and long amortization terms up to 25 years for the purchase of major fixed assets, such as owner-occupied commercial real estate, energy efficient “green” initiatives and/or fixed heavy duty machinery and equipment, including commercial marine vessels.
504 loans are paired with private-sector commercial loans and provide up to $5 million of aggregate SBA eligibility on standard 504 projects; up to $5.5 million per 504 energy efficient green project not exceed $16.5 million in the aggregate; and up to $5.5 million per eligible small manufacturing project with no limit on total SBA dollars available. These are SBA 2nd mortgage loan portions only; there is no limit on overall project dollar size.
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.