SBA 504 Loan at First Horizon National Corporation

The SBA 504 Loan program offered through First Horizon National Corporation is a financing solution designed to help small and growing businesses acquire long-term, fixed-rate financing for major fixed assets. Whether you are purchasing commercial real estate, constructing a new facility, renovating existing property, or acquiring long-lived machinery and equipment, the SBA 504 structure preserves working capital and supports sustainable growth by combining competitive interest rates with extended amortization schedules.

What the SBA 504 Loan Provides

• Long-term, low-cost capital: The 504 program typically provides fixed-rate financing for the portion of the project managed by a Certified Development Company (CDC), enabling predictable monthly payments over 10, 20, or 25 years.
• Low down payment: Borrowers commonly contribute a modest down payment, which helps conserve cash for operations and growth activities.
• Large project financing: Ideal for projects with significant hard asset costs such as land, buildings, site improvements, and heavy equipment.
• Favorable loan-to-cost structure: The program divides financing among the borrower, a private lender, and a CDC backed by the SBA, which reduces the borrower’s immediate capital outlay.

How the SBA 504 Structure Works

SBA 504 financing is a three-party loan structure. First Horizon typically partners with a local Certified Development Company (CDC) to deliver the SBA-backed portion of the financing while the bank provides a complementary first mortgage. The usual allocation is: a private lender (First Horizon) providing approximately 50% of the project cost, the CDC providing around 40% through an SBA-backed debenture, and the borrower contributing approximately 10% equity. This structure can vary depending on project type, business purpose, and borrower qualifications.

Eligible Uses

• Purchase of owner-occupied commercial real estate
• Construction of new facilities or expansion of existing space
• Renovation and tenant improvements
• Purchase of long-term machinery and equipment
• Refinancing of existing debt when tied to new expansion or job creation objectives

Typical Terms and Features

• Loan terms: CDC portion commonly offered in 10-, 20-, or 25-year amortizations.
• Interest rates: The CDC portion is generally fixed and derived from rates on SBA debentures; the private lender portion can be fixed or adjustable depending on underwriting and market conditions.
• Collateral and guarantees: Loans are secured by project assets, often with a first lien held by the private lender and a second lien for the CDC portion. Personal guarantees are typically required from principal owners.
• Fees: Borrowers should expect SBA and CDC program fees and typical closing costs; First Horizon works to transparently outline fee structures during the application process.

Eligibility and Borrower Requirements

SBA 504 loans are available to for-profit small businesses that meet SBA size standards and other program requirements. Eligible borrowers generally demonstrate sound business performance, a viable business plan, and the ability to create or retain jobs or meet public policy goals. Certain industries may be subject to additional considerations under SBA rules. First Horizon reviews each request holistically, evaluating credit history, cash flow, collateral, business purpose, and management strength.

Benefits for Small Businesses

• Cash preservation: Lower down payment requirements help businesses maintain operating liquidity for hiring, inventory, and marketing.
• Predictable payments: Fixed-rate CDC financing stabilizes long-term debt service, aiding financial planning.
• Access to larger loans: The combined lender/CDC structure enables financing of larger projects than might be feasible with conventional loans alone.
• Local relationship banking: First Horizon provides personalized guidance and leverages local market expertise to align financing with strategic business goals.

Application Process

First Horizon’s SBA lending team helps guide applicants through each phase of the SBA 504 process. Typical steps include an initial consultation and pre-qualification review, preparation of the loan package with required financial statements and project budgets, submission to the partnering CDC for SBA approval, underwriting and due diligence, appraisal and environmental reviews if required, and loan closing. Timelines vary with project complexity, but First Horizon aims to coordinate efficient processing and clear communication at each stage.

Why Choose First Horizon

First Horizon’s approach combines the servicing strength of a respected financial institution with dedicated SBA expertise. The bank understands the practical requirements of small-business owners and works collaboratively with CDC partners to structure SBA 504 financing that supports long-term stability and growth. Clients benefit from experienced underwriting, transparent fee disclosure, and ongoing support through loan administration and potential future financing needs.

Considerations Before Applying

• Prepare thorough project and financial documentation to accelerate underwriting.
• Understand the long-term commitment associated with fixed-rate, long-term amortization.
• Assess job creation or community impact objectives relevant to SBA criteria.
• Coordinate with your tax and legal advisors about property ownership structures and potential tax implications.

Conclusion

An SBA 504 Loan through First Horizon National Corporation represents a powerful financing tool for small businesses focused on investing in long-lived assets and strengthening their capital structure. By combining lower down payment requirements, fixed-rate long-term financing, and partnership with SBA-backed CDC lending, this program supports strategic growth while preserving working capital. For businesses planning property purchases, construction projects, or substantial equipment investments, SBA 504 financing can be a compelling option to achieve long-term financial stability and operational expansion.

Address Bank: Memphis, Tennessee, U.S.
Bank: First Horizon National Corporation
Headquarters: Memphis
Products: Loans & Credit
Type: SBA 504 Loan