Florida First Capital Receives Approval for First 504 Refinancing Deals in Florida

May 2011

FFCFC is getting 504 debt refinancing deals done in Florida!

Florida First Capital is pleased to announce it has received approval from the Small Business Administration (SBA) for the first 504 refinancing deal done in all of Florida.

Carlos Calero, FFCFC Loan Officer & Vice President in South Florida, worked with lending partner Community Bank of Florida on the $2.6 million deal for the Lazy Days Restaurant in Islamorada.

The loan proceeds will be used by the borrowers to refinance two outstanding mortgages on their restaurant location, which includes two buildings with a total of 4,917 square feet situated on a 33,725 square foot lot.

Additionally, Florida First Capital subsequently received approval for the first 504 debt refinancing deal done in North Florida.

James Hosman, FFCFC Loan Officer & Vice President in Northwest & Florida Panhandle, worked with lending partner Hancock Bank on the $1.7 million deal for Skate World Center, Inc., in Tallahassee.

The loan proceeds will be used by the borrower to refinance the seller note on the 24,431 square foot skating rink situated on a 78,844 square foot lot. Proceeds will also be used to cover professional fees and interim points and costs so that the borrower can reduce his cash outlay, thus helping to preserve working capital.

The 504 debt refinancing program allows small business owners with eligible commercial real estate (CRE) mortgages to take advantage of stable and long-term SBA 504 financing and thus avoid potential foreclosure on CRE mortgages approved before and during the recession that were based on inflated real estate values.

With a large percentage of CRE mortgages set to mature within the next few years, commercial lenders can take advantage of the program as well by removing a percentage of those existing CRE mortgages from their books and freeing up capital they can use to make more small business loans.

The 504 debt refinancing program, authorized under the Small Business Jobs Act of 2010, is in effect through Sept. 27, 2012.

Refinancing Program Guidelines

• Borrowers are able to refinance up to 90% of the current appraised property value or 100% of the outstanding mortgage, whichever is lower, plus eligible refinancing costs.
• Loan proceeds may not be used for other business expenses. Existing 504 projects and government-guaranteed loans are not eligible to be refinanced.
• To be eligible a business must have been in operation for at least two years; the debt to be refinanced must be for owner-occupied real estate and have been incurred no less than two years prior to the date of application; and the proceeds used for 504-eligible business expenses, and payments on that debt must be current for the last 12 months.
• Total of first and second mortgages on refinance will be 90% and structured as follows: third party lender 50%; FFCFC/SBA 40%; and borrower 10% equity injection.
• In addition to a cash contribution, the borrower's 10% contribution may be satisfied by its equity in the eligible fixed asset (the 504 project) serving as collateral for the refinancing project or by the equity in any other fixed assets that are acceptable to the SBA as collateral.
• The 504 refinance program does not provide for any cash out.

Download a 504 refinancing program information sheet (pdf).

For more information about the 504 debt refinancing program, contact a Florida First Capital loan officer (regional office locations), email us at info@ffcfc.com or call us at 888.320.5504.