Red and White Fleet Finances Revolutionary Hybrid Boat with SBA 504 Loan Administered by TMC Financing

Iconic San Francisco Business Expands their Fleet with the Environment in Mind 

Tom Escher, President of Red and White Fleet, is setting out to change the maritime industry.  Cars have seen a revolutionary change and he believes it’s time for boats to follow suit.  This is why Red and White Fleet utilized the SBA 504 Program to build the largest U.S. flagged, hybrid electric passenger vessel ever built.

The new 600-passenger vessel was christened Enhydra after the scientific name of the California sea otter.  It is designed for sightseeing tours, with all three floors offering 360 degree views of the San Francisco Bay and Golden Gate Bridge.  The vessel runs on a lithium-ion battery pack supported by generators – drastically reducing fuel consumption and its carbon footprint.  When running in all electric mode, Enhydra emits no harmful exhaust emissions and has a much higher energy efficiency.  The battery system is sufficient to meet the entire demand of the vessel’s power needs while providing silent and emission-free operation.

Even for Red and White Fleet, one of San Francisco’s oldest and most well-known companies, conventional loan terms were steep for their exciting new project.  “This boat is going to be a game changer,” states Escher.  “It will be worth it, but building this revolutionary boat is an expensive undertaking.  The SBA 504 Loan terms helped make this undertaking happen.  Without the long term and low rate, it might not have been possible.”

With the unique structure of the SBA 504 Program, Escher was able to complete construction with only 20 percent down.  “Many atypical projects such as this one would require a down payment from a conventional lender as high as 40 percent,” explains Kurt Chambliss, Executive Vice President of TMC Financing.  “SBA 504 loans have three participants: a bank that provides a first mortgage, a certified development company, like TMC, that provides the SBA loan, and the small business owner who provides the down payment.  Banks are willing to lend with better terms because their risk is reduced with the SBA backing.”

The SBA 504 Program was created to help small businesses purchase fixed assets for their business.  Most often, these loans are used to purchase real estate, however equipment falls under fixed assets that qualify for the program as well.  The loans also cover construction and renovation costs so in this case, the 504 funds were used for the entire construction of the boat.

Family-owned Red and White Fleet has origins dating to 1892 when Thomas Crowley, the grandfather of current owner, Tom Escher, used his $80 savings to purchase a used Whitehall boat.  Crowley, like other bay boatmen, transported miscellaneous goods in addition to professionals traveling across the bay. His business expanded quickly, soon growing his fleet to three Whitehalls and serving the ship traffic twenty-four hours a day.

During World War I, Crowley’s vessels were used to carry goods between San Francisco, South America and Australia.  Their passenger services also continued to flourish, relying strongly upon tourists’ desires to view the city from the water along with the several historical battleships docked in the Bay.  The company began offering its iconic Golden Gate Bay cruise 80 years ago during the Golden Gate International Exposition.

Today, Red and White Fleet is run by Escher, the grandson of Crowley, who started working on the company’s first boat as a sweeper and mechanics helper.  The company continues to specialize in sightseeing experiences and creating lasting positive memories of San Francisco. 

“This was such an exciting project,” states Chambliss.  “We are thrilled we could help one of San Francisco’s oldest running companies – and a fixture of the Bay – expand their fleet in such an environmentally conscious way.  This is their first big step towards moving their fleet towards zero pollution and we’re proud to have played a part in this great accomplishment.”

About SBA 504 Real Estate Loans

The Small Business Administration 504 loan program allows small-business owners to finance commercial real estate and other fixed assets with long-term, below-market, fixed interest rates. SBA 504 loans can be used to finance the total project cost (TPC), which can include the purchase price, construction/renovations, equipment, soft costs and closing costs. A typical 504 loan project requires a down payment of only 10 percent of the TPC from the borrower, with the remaining amount split between a first mortgage provided by a commercial lender and a second mortgage provided by a certified development company (CDC). By enabling owners to keep their capital working to grow the business and create jobs, the 504 program provides businesses and communities long-term stability.Business owners can confirm they meet the qualifications for an SBA 504 loan by visiting the TMC Financing website.

About TMC Financing

TMC Financing is the No. 1 CDC in Northern California and has ranked in the top five CDCs nationwide for two decades. During the past 35 years, TMC has provided over $9 billion in financing for more than 5,000 businesses throughout California and Nevada. For more information on SBA 504 loans and the local businesses they support, visit