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If You’re Purchasing New or Used Machinery or Equipment the 504 Program Can Help

If You’re Purchasing New or Used Machinery or Equipment the 504 Program Can Help

Published: 08/07/2012

» Manufacturing News

The Small Business Administration (SBA) 504 Loan Program offered through Florida First Capital provides available and affordable long-term capital for the purchase of major fixed assets, such as owner-occupied commercial real estate and/or heavy duty machinery and equipment, without the high down payment requirements often associated with conventional financing programs.

The 504 Loan Program may also be used for a limited time to refinance existing fixed asset business debt without the requirement of expansion, which is normally the case.

Loan Structure & Down Payment Schedule
The 504 Loan Program is a partnership program between Florida First Capital, which is a nonprofit SBA Certified Development Company, and a commercial lender. Working with participating lenders, Florida First Capital provides up to 90% financing at below-market, fixed interest rates and long amortization terms for eligible fixed asset purchases.
Typically, a commercial lender provides financing for 50% of the 504 loan project 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%.
If a project is a start-up business (less than two years in operation) or a special purpose facility, the borrower’s down payment increases to 15%. If a project is a special purpose facility and a start-up business, the borrower’s down payment increases to 20%.
Machinery and equipment only loans may qualify with a 10% or 15% borrower down payment.
  • The business must fall within the size standards set by the SBA.
  • Owners must be U.S. citizens or registered aliens with green card.
  • The business must be operated for profit and be located in or planning to locate in Florida.
  • The business must be a legal entity: corporation, partnership, sole proprietor or limited liability company.
  • The business’s tangible net worth cannot exceed $15 million.
  • The business’s average net income after Federal income taxes (excluding carry-over losses) for the two full fiscal years prior to application cannot exceed $5 million.
  • Loans cannot be made to businesses engaged in speculation or investment in rental real estate.

For more information on the 504 loan program click here for a quick reference guide: or visit their website directly at