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504 Bridge Loan Program Eliminates Interim Financing Risk for Commercial Lending Partners

Aug 2013

One of the most critical stages for a commercial lending partnerin a 504 loan is the interim phase of a project between their closing and the SBA takeout of the second mortgage, during which time the commercial lending partneris at risk on the second mortgage.

As part of Florida's participation in the State Small Business Credit Initiative (SSBCI), the 504 Bridge Loan Program addresses this exposure by greatly reducing the interim risk for commercial lending partners.

Through a Participation Agreement with Enterprise Florida, Inc., the 504 Bridge Loan Program provides commercial lending partners with loan proceeds (SSBCI funds) for all or part of the interim financing until the permanent SBA second mortgage takeout occurs.

This is a win-win for both borrowers and 504 commercial lending partners.

Borrowers receive the best possible terms under the 504 Program, which allows for the expansion of their small businesses and the creation of new permanent jobs in their communities.

504 commercial lending partners are able to limit their risk exposure during the critical build-out phase of a project and in turn ultimately make more capital available for Florida's small businesses.

Florida First Capital manages the back office administration of the program working in conjunction with Enterprise Florida and has the most experience of any Certified Development Company in the state in getting 504 bridge loans done.

504 Bridge Loan Program Details

• Loan sizes range from $250,000 (recommended minimum) to $5 million (legal maximum).There is no limit on total project size.

• The normal term permitted is six (6) months; however, the Participation Agreement allows for extensions with pricing adjustments.

• Funds may be used on authorized SBA 504 loan projects including turn-key acquisitions, renovation or build-out projects, ground-up construction and/or fixed heavy duty machinery and equipment purchases.

• The commercial lending partneris entitled to retain a servicing fee during the first six (6) months of the interim financing.

Click Here for Frequently Asked Questions

To participate in or for more information about the 504 Bridge Loan Program, commercial lending partners should contact a Florida First Capital loan officer.