June 2020
Ask The Experts
SBA 504 Q&A: EPC Activity

Q: Can an Eligible Passive Concern (EPC) have activities outside of being a real estate holding company?

Ask the Florida First Capital SBA 504 Loan ExpertsA: An EPC (excluding a trust) may not engage in any business activity other than leasing the property to the Operating Company (OC).

For EPCs engaging in business activity outside of leasing the project property to the OC at the time of application, any such outside business activity will have to be resolved prior to submitting the application to the Small Business Administration (SBA).

Prohibited business activity also includes leasing to other operating companies that are affiliated with the project OC, which may have been allowed in a previous SBA loan, however is no longer allowed under the SBA’s current Standard Operating Procedure.

If you have a question for our SBA 504 loan experts, email us at info@FloridaFirst.com or call 850.681.3601 or toll-free at 800.504.LOAN.