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SBA 504 Loan Helps General Contractor Go “DIY”

Jul 2015

Should doctors treat themselves? Should accountants do their own taxes? Should contractors build their own buildings? Well, as far as the Small Business Administration (SBA) is concerned, at least one of those is permissible under the 504 Loan Program. Care to guess which one?

Talk to anyone at Oelrich Construction in Jonesville, Florida, and they'll tell you their success comes from working as a team to take care of their clients. That approach has fostered the growth and maturation necessary to expand the company from just a few employees to over 20 and celebrate more than 10 years in business.

When it came time for owner Ivan Oelrich to complete the company's next phase of expansion, the ground-up construction of a 4,500 square-foot office building to serve as the company's headquarters, he could not think of a better contractor for the job than himself and the company that he had founded.

“Under the 504 Loan Program guidelines (SOP), this type of project is an eligible use of funds, provided certain conditions are met,” said Kristen Tackett, Florida First Capital Vice President and Business Development Officer for Northeast Florida. “The approximately $700,000 project met all of the criteria set forth in the SOP and therefore, was a perfect fit for the 504 program,” she said.

According to the 504 Loan Program guidelines, “do-it-yourself” construction and/or installation of machinery and equipment, or situations where the borrower acts as his own contractor may be permitted, if the 504 certified development company can justify and document in the loan file that:

a) The borrower/contractor is experienced in the type of construction and has all appropriate licenses;

b) The cost is the same as, or less than, what an unaffiliated contractor would charge as evidenced by two bids on the work; and

c) The borrower/contractor will not earn a profit on the construction.

Oelrich Construction's business approach involves its entire project team and is centered on clear communication and proactive management from the beginning. This method ensures delivery of a successful project while maintaining their commitment of excellence to their clients. Oelrich Construction has completed a variety of commercial projects over the last decade, including government, education and healthcare industry projects.

Visit Oelrich Construction online at www.oelrichconstruction.com.

For more information about SBA 504 loans in Florida,contact a Florida First Capital Loan Officer hereor email us atinfo@ffcfc.com. Phone: 850.681.3601 or toll-free at 888.320.5504.