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SBA 504 Loan Helps Local Golf Equipment Supplier Beat the Odds

Jun 2019

The golf industry has suffered a flattening of the game's participation rate in recent years and equipment suppliers have paid the consequences, especially small locally owned shops. One by one, they have faded away, leaving big-box businesses, such as the PGA Tour Superstore, Academy Sports and Edwin Watts, as the only options.

Masterfit Golf of Orange Park, however, is an exception against the odds. Masterfit recently celebrated its 25th year in business on the First Coast under co-owners Phil Lanza and John Schroeder. The company, which has 15 employees and did a record $3 million in revenue last year, continues to offer one-stop shopping for custom club fitting, club repair/renovation, sales and golf instruction.

To accommodate Masterfit's growth, Lanza and Schroeder worked with Florida First Capital and utilized the Small Business Administration (SBA) 504 Loan Program to finance the $550,000 purchase and renovation of an 8,000 square-foot building in Orange Park. Business is so good in fact, they're looking at adding more hitting bays and simulators (they have 15 simulators so far). They also currently operate the only free-standing practice range still in operation on the First Coast, which also offers club fitting and sales.

“This is the kind of project that the SBA 504 Loan Program was designed for,” said Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida. “By utilizing a 504 loan, not only do the borrowers get a long-term, below-market fixed interest rate with predictable mortgage payments, but they were able lay out a small 10% down payment and can devote the equity injection savings to working capital.”

The formula for Masterfit, Lanza and Schroeder say, is equal parts hard work and unparalleled customer service. They sell their own stuff, build everything on site, focus on fitting to match the equipment to a player's particular game stytle, and charge reasonable prices.

After 25 years, they're doing something right. Congrats Masterfit Golf!

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, renovations, new construction, energy efficient “green” initiatives and/or fixed heavy duty machinery and equipment, as well as the refinance of commercial mortgage and other business debt with or without a cash-out option.

Under a typical 504 loan structure, a commercial lending partner provides financing for 50% of the 504 loan and takes a first lien position; Florida First Capital/SBA provides 40% of the project financing and takes a second lien position; and the borrower provides a down payment of just 10% in most cases.

504 loans 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/First Capital Finance Loan Officer or email us at info@ffcfc.com. Phone: 850.681.3601 or toll-free at 800.504.LOAN.