TMC Financing Administers $10.8M in total project financing for Arizona Golf Pros
The Small Business Administration’s (SBA) 504 loan program is an outstanding option for small business owners looking to purchase commercial real estate. The SBA 504 loan not only enables entrepreneurs to buy owner-occupied property at below-market, fixed interest rates, but it can also help amplify business growth.
This was certainly the case for David Ashton, owner of Coyote Lakes Golf Club.
Aston and his business partner financed their first golf course the traditional way: which meant coming up with a 30 percent down payment. Unaware of SBA 504 loan, Ashton believed the only way to raise that type of capital was through external investors.
“I didn’t realize I could have gone through the SBA 504 loan program and acquire up to 85% financing for my golf course,” stated Ashton. “Instead, we were in a scenario where we had to go out and raise external capital from private investors, which was both time and energy-consuming project and very difficult to manage.”
In 2022, Ashton was ready to expand his business with the purchase of a second golf course.
This time he decided to utilize the SBA 504 loan program and take advantage of the unbeatable terms.
Geoff McGivern, senior vice president of business development for TMC Financing, helped guide Ashton through the 504 loan process. Ashton immediately recognized that an SBA 504 loan was the perfect financing solution for his business expansion.
“With a conventional bank, you might be able to finance up to 70% loan to value, but with SBA 504 loans, you can go up to 85%,” states Ashton. “That makes a really big
difference for a small business owner. We were able to fund our 15% down payment with cash from our operations rather than needing investor money.”
With the SBA 504 loan, Ashton purchased his Coyote Lakes golf course with no additional financing.
Coyote Lakes in Surprise, Arizona, is a 6,213-yard, 18-hole golf course. It’s quickly become the favorite among serious golfers in the West Valley and earned a 4-star rating from Golf Digest. Described as fun and surprisingly challenging, Coyote lakes is known for its affordability and great amenities.
The SBA 504 Loan Program: the right financing solution for special purpose properties
Coyote Lakes Golf Club is defined by the SBA as a special purpose property, that means:
- The property has a limited market of commercial buyers
- It has a unique design, layout, or construction materials
- Due to its features, it is limited to a specific purpose
Geoff McGivern explains, “financing unique properties such as a golf course can often come with less than favorable terms with conventional financing, requiring up to a 40 percent down payment. The 504 loan requires only a 15 percent down payment, which allows owners like David to acquire property they otherwise wouldn’t be able to afford. It’s a win-win.”
David Ashton is thrilled he decided to utilize the SBA 504 loan to purchase his second golf course.
“The difference in how this purchase feels compared to our first golf course is indescribable,” Ashton says. “The money we saved with the 504 loan has allowed us to focus on operating the business in the most effective way possible, without a secondary concern for what external investors may think.”
Ashton recommends that even early-stage entrepreneurs investigate the SBA 504 loan before they engage in recruiting investors who share their vision.
“I would highly recommend the SBA 504 loan program, to the point where I would say to many entrepreneurs: If you can’t get into an SBA program, don’t even bother. The SBA program can cut your external capital burden in half, and there’s an enormous amount of
value in that. You will have the relief of managing your business yourself, rather than being focused on how happy your investors are, this creates a completely different business experience.”
Today, Coyote Lakes is thriving.
The owners recently closed on their second SBA 504 loan to purchase a third golf course – Palmbrook Country Club. In total, Ashton’s business has secured $10.8M in total project financing without the burden of external investors.
“Geoff was my first call when I decided to use SBA funds again to purchase Palmbrook. The TMC staff couldn’t have been better to work with. I’m thankful that the SBA 504 program has allowed us to get to a place where we can grow while standing on our own two feet.”
Contact TMC Financing to find out more or get started with the SBA 504 loan program.