What the SBA 504 Loan Program Can Do for Your Clients...and You
 
By Kristen Tackett • Agency Lending Assistance Representative Please note that information in this article may be time sensitive and specific to the date it was originally published. Please contact the author for updates to this information.


Do you know a small business that needs to expand its facilities? Is it looking to purchase the building it’s currently leasing? Has it run out of room at its current location and wants to buy a larger building? Has it been so successful that it’s looking to build a brand new facility? Does it need to purchase machinery and
equipment?

In all of these cases, your client will be well-served by considering financing through what is known as the 504 Loan Program. 504 loans are especially useful for rapidly growing and slightly newer businesses. The 504 Loan Program provides a small business access to Wall Street rates and terms because part of the financing is guaranteed by the U.S.

Small Business Administration (SBA). The program is administered by SBA licensed Certified Development Companies (CDCs) like JEDCO. There are nine CDCs in Florida and more than 270 CDCs nationwide.

The 504 program typically requires a cash injection by the small business of only 10% of the total capital financing project (both “hard” and “soft” costs). The remaining 90% is financed by a combination of a commercial mortgage and a bond issue. This can save a small business a significant amount of needed
cash and working capital.

The commercial mortgage portion of the financing (usually 50%) is at the lender’s own rates and terms. The
SBA guaranteed bond issue provides up to 40% of the financing, with terms and rates fixed for 20 years in
most cases. If you have a client that can benefit from a 504 loan, please call JEDCO today.

JEDCO is an acronym for the Jacksonville Economic Development Company, an SBA Certified Development Company. JEDCO is a non-profit organization dedicated to growth and economic development here in Northeast Florida. JEDCO provides free technical assistance and works with the borrower from beginning to end in arranging a 504 loan. And remember—JEDCO helps your business grow!

Kristen Tackett is an SBA 504 loan
expert for JEDCO. She can be reached
at 904-398-9411 or kristen.t@jedco.net.