SBA 504 Loan in First BanCorp

The SBA 504 loan offered through First BanCorp is a specialized financing solution designed to help established small and medium-sized businesses purchase, construct or upgrade long-term fixed assets. Combining a conventional bank loan with a certified development company (CDC) debenture, this program provides low down payment options, competitive fixed interest rates, and extended repayment terms to support business growth, job creation, and community development.

Who this product is for

The SBA 504 loan is ideal for business owners who need capital to acquire or improve commercial real estate, purchase essential machinery and equipment, or launch major expansion projects. Typical borrowers include:

• Established small businesses seeking permanent financing for owner-occupied commercial property
• Manufacturers and service providers investing in long-lived equipment
• Companies planning facility expansion, renovation, or construction
• Entrepreneurs focused on long-term stability and predictable debt service

Key benefits

• Low down payment: Borrowers can often secure financing with a down payment as low as 10%, preserving working capital for operations and growth.
• Fixed-rate financing: Long-term, fixed-rate CDC debentures protect businesses from interest rate volatility and simplify financial planning.
• Extended terms: Typically offers long amortization periods that reduce monthly payments and increase cash flow flexibility.
• Large financing amounts: Suitable for substantial projects where long-term capital is required.
• Structured partnership: Combines First BanCorp’s conventional lending expertise with CDC-backed financing to deliver a tailored funding package.

What you can finance

The SBA 504 program focuses on long-term fixed assets that support business operations and job retention:

• Purchase of owner-occupied commercial real estate
• Construction of new facilities or expansion of existing property
• Renovation and energy-efficiency upgrades
• Purchase of heavy machinery and manufacturing equipment with a long useful life
• Site improvements and certain soft costs associated with development

Typical structure and terms

While each transaction is customized to the borrower’s needs, SBA 504 loans typically combine two pieces of financing: a first mortgage from a bank such as First BanCorp and a second, long-term fixed-rate CDC debenture. This blended approach provides strong leverage and competitive overall cost of capital.

• Loan size: Designed for medium and larger project financings; amounts vary by project and underwriting.
• Down payment: As low as 10% in many qualified cases.
• Term lengths: Long amortizations are common; terms depend on the asset type and project structure.
• Rate structure: Fixed rate on the CDC portion to protect against rate swings; the conventional portion may be fixed or variable depending on borrower preference.

Eligibility highlights

Eligibility for the SBA 504 loan generally requires the business to meet SBA size standards and demonstrate sufficient cash flow and collateral to support the project. Common eligibility considerations include:

• Business must qualify as a small business under SBA size guidelines.
• Project must create or retain jobs and/or meet community development goals.
• Owner-occupancy requirement for real estate: the business should occupy a substantial portion of the property.
• Demonstrated creditworthiness, management experience, and realistic financial projections.

Application and approval process

First BanCorp streamlines the SBA 504 application with experienced loan officers and CDC partners to guide borrowers from prequalification to closing:

1. Prequalification: Initial review of eligibility, project scope, and financing needs to determine program fit.
2. Application: Submission of financial statements, tax returns, business plan, project pro forma, and other documentation.
3. Underwriting: Detailed assessment of credit, collateral, and cash flow alongside CDC review and SBA processing.
4. Approval and closing: Coordinated closing with bank and CDC funding; long-term CDC debenture issuance completes the package.

Documentation commonly requested

To facilitate a timely review, borrowers should be prepared to provide standard business and project documentation:

• Recent business and personal tax returns
• Financial statements and balance sheets
• Business plan and project description
• Projections showing repayment ability
• Purchase agreements, construction contracts, and equipment invoices
• Ownership documentation and organizational records

Why choose First BanCorp for SBA 504 financing?

First BanCorp combines local market knowledge with proven SBA lending experience to deliver customized funding solutions. Borrowers benefit from:

• Dedicated SBA specialists who navigate the program’s requirements
• Collaborative approach with CDC partners to optimize terms and timelines
• Ability to structure deals that balance affordable payments with long-term business objectives
• Commitment to supporting projects that foster economic growth and job creation

Considerations before applying

SBA 504 financing is best for borrowers focused on long-term stability and asset investment. Prospective applicants should evaluate project timing, the need for owner-occupancy, and readiness to provide comprehensive documentation. While the program offers attractive terms, underwriting standards are rigorous to ensure the long-term viability of the business and the project.

Final note

The SBA 504 loan in First BanCorp is a strategic financing option for businesses planning significant capital investments in property or equipment. With low down payment possibilities, predictable long-term rates, and a structured partnership between a private lender and a CDC, this product enables companies to grow with confidence while maintaining operational liquidity. Discuss your project goals with a First BanCorp lending specialist to explore how SBA 504 financing can fit into your capital plan and support sustainable growth.

Address Bank: San Juan, Puerto Rico
Bank: First BanCorp
Headquarters: San Juan, Puerto Rico
Products: Loans & Credit
Type: SBA 504 Loan