SBA 504 Loan Program

The Small Business Administration’s Section 504 Loan Program is specifically designed to provide long-term fixed asset financing that helps small businesses grow. The Tampa Bay Economic Development Corporation (TEDCO), in partnership with local financial institutions, provides funding for projects that expand small business operations and create jobs in our community. TEDCO administers the SBA Section 504 Loan Program as a Certified Development Company (CDC) for the Small Business Administration.

The SBA 504 Loan Program creates a 3-party partnership:

  • A private institution, such as a commercial bank, typically provides 50 percent of the total project financing. The bank holds a first mortgage lien position on the assets being financed, providing them with an incentive to offer more reasonable terms and favorable rates.
  • TEDCO finances up to 40 percent of the project.
  • Your company, the small business concern (SBC), normally contributes only 10 percent of the total project cost–a substantial savings of working capital for you.

PROJECT ELIGIBILITY
SBA 504 Loans are designed specifically to help small business concerns with long-term, fixed asset financing, including the following:

LOAN TERMS
The term for an SBA Section 504 Loan is 10 years for equipment and 20 years for real estate financing. Private financial institutions are required to provide no less than 10 years financing on real estate and 7 years financing on equipment.

You negotiate the interest rate on the first mortgage lien position with the financial institution. The financial institution’s excellent collateral position will allow them to offer better than normal rates.

Your SBA 504 rate is based on the current market bond rate at the time of the debenture sale. The actual cost includes an administrative and servicing spread over the current market bond rate.

SBA 504 Loans require personal guarantees from individuals with 20 percent or more ownership in the small business concern.

Service Area Florida with an emphasis on the Greater Tampa Bay area
Loan Amount 40% of project costs. Minimum $125,000. Maximum $5.5 million.
Use Of Loan Proceeds
  • Real estate and/or construction
  • Renovation
  • Long-term equipment
  • Refinancing of existing real estate and/or equipment debt
Job Creation One job created for every $65,000 of SBA loan
Eligibility
  • Company’s net worth less than $15 million
  • Net profit after taxes not greater than $5 million
Term 20 years (Equipment alone 10 years)
Interest Fixed rate
Repayment Monthly payments
Collateral Second position on real estate/equipment
Borrower’s Cash Participation Minimum 10% of project costs
Deposit to review loan application $100.00

HOW TO APPLY
Your TEDCO 504 Loan representative will guide you through the application process. Just call 813-831-8600 to make an appointment. You should be prepared with:

  • A description of the project
  • Estimate of total project costs, including new construction, renovation, machinery and equipment.
  • Any purchase agreements or offers to purchase for real estate involved in the project.
  • Information related to your company’s products, marketing, distribution and growth projections.
  • Tax returns of the company for the past three years, with an interim statement less than 90 days old and debt schedule
  • Personal financial statements and tax returns for the past three years for all owners with 20 percent or more ownership.

Please contact us more information or application procedures.