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Florida First Capital Enhances Financing for Small Business Through the 504 Bridge Loan Program

Sep 2013

The Florida Department of Economic Opportunity (DEO) reports that the State Small Business Credit Initiative (SSBCI) has thus far deployed more than $31 million in program funds and leveraged more than $138 million in private financing for small businesses in Florida.

Administered by the DEO's Division of Community Development in partnership with Enterprise Florida Inc., the SSBCI program provides much needed access to capital for Florida's small businesses.

To develop the SSBCI program, Florida allocated $97.6 million of U.S. Department of Treasury funds to create the Capital Access Program, the Venture Capital Program and the Small Business Loan Support Program, including the 504 Bridge Loan Program.

Under the 504 Bridge Loan Program, one of the most critical stages for a commercial lending partnerin a Small business of Administration (SBA) 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.

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

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.

FAQs About the 504 Bridge Loan Program

“Small businesses should take notice that Florida's economic development team is committed to helping small businesses grow and thrive,” said DEO Executive Director Jesse Panuccio. “We look forward to continuing our successful partnership with Enterprise Florida, Florida First Capital and Florida Opportunity Fund and thank them for their unyielding commitment to growing Florida's economy.”

The SSBCI is a federal initiative of the U.S. Small Business Jobs Act of 2010 that encourages states to establish or strengthen state programs that support lending to small businesses. SSBCI funds leverage private lending to help finance small businesses that are creditworthy, but are not getting the loans they need to expand and create jobs. SSBCI funds are expected to leverage close to $1 billion in private lending to Florida small businesses.

The funding for the program is dispersed in three increments. The first disbursement was provided Aug. 24, 2011, and the second was provided on June 19, 2013.

Each disbursement is contingent upon Florida obligating at least 80% of the funds provided from the previous year. The program has successfully obligated these funds, and is looking forward to the success the 2013 allotment will bring to Florida small businesses.

To participate in or for more information about the 504 Bridge Loan Program, 504 commercial lending partnershould contact a Florida First Capital Loan Officer here or email us at info@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.