Created as part of the Small Business Jobs Act of 2010, SSBCI was designed by the federal government to help states strengthen existing loan and equity programs and/or create new programs that support financing small businesses. Florida received a total SSBCI allocation of $97,662,349.
The primary objective of Florida’s SSBCI Program is to leverage private capital for Florida’s small businesses, which are defined as businesses with 500 employees or less. After five years, Florida must show that, taken together, $10 in new small business lending or investment was generated by every $1 in SSBCI funding. Therefore, Florida’s SSBCI Program is anticipated to generate at least $976,623,490 in new private capital for Florida’s small businesses.
The Loan Guarantee Program and Loan Participation Program are available to qualified businesses that demonstrate adequate historical and/or proposed cash flow coverage and other credit underwriting metrics. However, these transactions will be undertaken to help mitigate any perceived credit weaknesses by the Partnering Lender.
I am small business seeking financing. Can I apply directly to EFI for a loan or a grant under the SSBCI Program?
No. The SSBCI program does not offer grants or direct loans. It provides loans guarantees and/or loan participations to commercial lenders, credit unions and Certified Development Finance Institutions (CDFIs) that extend credit to small businesses in Florida. If you are pursuing financing for a small business, you should contact a local lender in your area and discuss your financing needs and, if needed, apply for a small business loan.
What is an SSBCI Loan Guarantee?
Florida Department of Economic OpportunityDivision of Strategic Business Development
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An SSBCI Loan Guarantee provides a lender with a partial guarantee as the credit enhancement required to ultimately approve a loan. The following are the typical terms:
What is an SSBCI Loan Participation?
An SSBCI Loan Participation permits the purchase of a portion (up to 50%) of the loan originated by the lender, facilitating the loan by reducing the lender’s credit risk. The following are the typical terms:
The most common Loan Participation is the 504 Bridge Loan Participation. These transactions will be processed by Florida First Capital Finance Corporation (FFCFC), working in conjunction with Enterprise Florida.
With SBA 504 Loans, lenders are permitted to finance equipment and owner-occupied real estate purchases up to ninety-percent (90%) of the total project cost. The lender makes such a loan with the expectation that the portion above 50% will be “taken-out” by a SBA-guaranteed note. However, there is often a timing difference between initial closing and that take-out. The 504 Bridge Loan Program will address this timing difference. Therefore, by removing this interim 90% financing risk for lenders, the 504 Bridge Loan Program makes more capital available for Florida’s small businesses.
What uses of funds are Eligible?
The loan proceeds must be used for a “business purpose.” A business purpose includes, but is not limited to, startup costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes.
What uses are Ineligible?
What types of lenders can use the program?
Eligible lenders include any insured depository institution, insured credit union, or community development financial institution (CDFI), as those terms are defined in section 103 of the Riegle Community Development and Regulatory Improvement Act of 1994 (12 USC 4702)
For additional information for lenders click here.
What borrowers are eligible?
What borrowers are ineligible?
What is the term of the guarantee or participation?
Loan Guarantees and Loan Participations provide support for thirsty-six (36) months.
Is there a fee?
For Loan Guarantees, there is generally a one-time, non-refundable fee of 1.50% of the guaranteed amount, payable to EFI on or before the Transaction Closing Date. Also, an on-going anniversary guarantee fee equal to 1.00% of the outstanding balance of the guaranteed portion of the loan, while the guaranty is in effect. For Loan Participations, the fee ranges from .50% to 1.50% depending on the terms of the participation. For 504 bridge loan participations the fee is typically .50% of participation (1.00% if ground-up construction)
We are a Community Development Financial Institution (CDFI) in Florida. How can we participate in the program?
Community Development Financial Institutions (CDFIs) are eligible lenders as well as eligible borrowers under the SSBCI program.
CDFIs as eligible lenders that receive credit support: CDFIs may enroll transactions in the state’s lending programs just like traditional banks.
CDFIs as eligible borrowers of SSBCI funds: Non-depository CDFIs are eligible borrowers under the program. This provision allows a financial institution to lend to a CDFI with SSBCI support to provide CDFIs with funds, or increased capacity to do small business loans.