Resources: Finding Financing

From industrial revenue bonds to special tax refunds for

businesses that meet recycling and transportation requirements, financing

choices seem plentiful, but how do you actually get your hands on the cash? It

can be overwhelming, but knowing where to look and how to decipher

sometimes-convoluted requirements may result in a favorable deal that will get

your business off the ground or help fund expansion.

A good place to start is Florida Gulf Coast University’s

Small Business Development Center. The center’s advisers understand the

intricacies of financing businesses and provide free confidential counseling.

The center also hosts free seminars that address frequently asked questions.

Much of the focus of these seminars is on loans, and bankers are available to

answer questions and advise potential borrowers, says Suzanne Specht, a

certified business analyst with the center, which is located in the Walden Center

in Bonita Springs and can be reached at (239) 948-4040.

Likewise, the economic development offices in both counties

have information on a number of financing options, some of which we’ve

spotlighted, and can help a business find the best match. They tend to work

with larger projects.

Both the Economic Development Council of Collier County and

the Lee County Economic Development Office administer industrial revenue bond

programs. The Collier County Industrial Development Authority issues municipal

bonds to new or expanding facilities that create jobs and promote economic

development. Eligible projects include manufacturing or industrial plants,

research and development parks, warehousing and distribution facilities,

corporate headquarters, health care facilities, airports and preservation of

historic structures. The minimum project size is $1 million.

Lee County’s economic development office offers industrial

development revenue bonds ranging from $3 million to $10 million for new and

expanding manufacturing facilities.

The offices also can help borrowers with the state

Enterprise Bond Program, which offers loans of $500,000 to $2 million to

manufacturers, processors and nonprofit groups.

On a smaller scale, the Collier EDC also works with the

Collier County Banking Partnership in a Micro Loan Program that provides loans

of up to $7,500 for the development of small businesses.

A loan source growing in popularity is the SBA 504 Loan

Program, administered by the Southwest Florida Regional Development Corp. The

local economic development offices and the Southwest Florida Regional Planning

Council were instrumental in forming the regional development corporation,

which covers nine counties. Until last fall, Lee County wasstyle="mso-spacerun: yes"> excluded because of a complicated—and many

say outdated—SBA for-mula involving the number of loans made in relation to

population.

The 504 program is designed to help businesses acquire land,

construct or expand buildings, or buy machinery. The borrower’s bank provides 50 percent of the loan, the borrower

makes a 10 to 20 percent down payment, and the SBA puts up the rest of the

money. Bankers like the program because it lowers their risk, explains Tom

Wallace, president of Nova Financial Services, which processes loans for the

program.

The 504 program is unique among government-supported loan

programs in that it carries a job creation requirement. For every $35,000

loaned, a job must be created. The program targets manufacturing companies and

pro-viders of professional office space. About one-third of the borrowers are

start-up ventures; the rest are established businesses wanting to expand.

When Gulf Coast American Blinds decided to expand, the 504

program was instrumental in persuading the company to stay in Collier County,

resulting in the retention of about 200 jobs, says program manager Deanne

Robison. Since 1999, the 504 program has made about $30 million in loans to 11

projects in Collier County. These projects have resulted in 411 new jobs.

In addition, the regional development corporation processes

an SBA loan known as the 7(a). While the 504 finances real estate and

machinery, the 7(a) is directed toward operating costs. The loan has a five- to

10-year payoff. Two Collier companies and five in Lee have taken advantage of

this loan in the past two years for a total of $1.7 million funded in Collier

and $2.8 million in Lee.

The only area municipality to offer its own loan programs is

Cape Coral. One program, the Small Business Revolving Loan, is funded with

fed-eral monies distributed to Cape Coral through the Community Develop-ment

Block Grant. For every $10,000 loaned, one full-time job must be created,

explains program administrator Joyce Ryan. The average loan amount is $50,000.

Since the program began in 1991, it has granted 20 loans totaling just over $1

million, resulting in the creation of 106 jobs. “We direct our efforts toward

businesses with high-wage, skilled jobs,” Ryan says.