With interest rates still at historic lows, now is a great time for small business owners to reap the rewards of owning rather than leasing commercial real estate.

Through the Small Business Administration (SBA), the U.S. Government has made the 504 loan program available to North Florida businesses. The low down payment and below-market interest rates of 504 loans offer small- to mid-size businesses the advantages of owning instead of paying rent. Businesses in every Florida county have taken advantage of these loans. Use of the program in Florida (and nationally) is at record levels.

504 loans enable owners to preserve more capital for other uses and gain the highest cash-on-cash return for that capital. In addition, longer loan amortizations mean smaller monthlypayments which lessens the impact on cash flow. Some new buyers realize a 40 percent overall reduction in real estate expenses.

Because of 504 loans' below-market rates, low down payments and favorable terms, they're often better suited to small businesses than conventional bank loans. 504 loans can be used to purchase real estate, build new facilities, modernize or renovate existing facilities, or purchase machinery or equipment. The program offers additional benefits for women-, veteran- and minority-owned companies, export-related companies and businesses in rural communities.

Typical loans range from $125,000 to $5 million. To qualify, a company must be a for-profit small business in Florida with a start-up or expansion project. Most types of projects and companies are eligible, with the exception of pure refinance.

Kristen Tackett is the Northeast Florida loan officer with Florida First
Capital Finance Corp. and can be reached at (904) 334-0651 or (904) 861-2270.
Kristen can also be Emailed at kristen@ffcfc.com.