Published
in the News-Press
on September 14, 2003, Business Section Page 1b, 2b
Program helps businesses grow
by Dick Hogan, Staff, News-Press
Local economy gets boost through creation
of jobs
After seven years, Mark and Gayle O'Neill took a deep breath
this year and decided to move their business - Hitch &
Trailer of Fort Myers - to a larger, higher-profile location.
"We had been looking because we've been cramped for
several years and everything was always a little bit more
than we thought we could afford," Gayle O'Neill said.
"And finally we said we just have to bite the bullet."
Now the O'Neills, currently jammed into 3,000 square feet
of working space with only six parking spaces on Andrea Lane,
will be moving around the end of October to a 6,000-square-foot
building on Ben C. Pratt/Six Mile Cypress Parkway with plenty
of parking and a quarter acre for storage and display.
They were able to take advantage of a program designed to
help businesses move into more spacious quarters and create
jobs for the local economy.
Called the Small Business Administration 504 Loan program,
it's administered locally by the nonprofit Southwest Florida
Regional Development Corp.
Tom Wallace, president of the RDC, said the program has been
successful here in part because of the rapid pace of growth.
"This is a pretty nice market."
Companies using the program typically borrow 50 percent of
the money needed for a move or expansion from a local bank,
and the RDC loans another 30-40 percent with the remaining
10-20 percent coming from the borrower, Wallace said.
That has two big advantages for the borrower:
• The RDC's portion is for a 20-year fixed-rate loan,
almost never available from a bank for a commercial loan.
With more time to pay off the loan, a company has more working
capital left to grow its business.
• With the SBA guaranteeing that part of the loan,
interest rates are lower and there's still money left over
to fund the program without taxpayer assistance after the
SBA-backed loans are bundled and sold to investors.
Because half the project costs are covered by the borrower
or the RDC's loan, banks are more willing to lend money and
give favorable terms than they would if faced with having
to handle the deal unassisted.
Since the program got going in earnest, Wallace said, it's
funded $81.2 million in total business expansions that have
added more than a thousand jobs to the local economy. The
RDC's loans total $38 million with only one in default.
To qualify, the project must add jobs to the local economy
- one job per $35,000 - and the money must be spent on capital
expenditures, not just operating expenses to keep the business
running, he said.
Gayle O'Neill said it will be a relief when Hitch & Trailer
moves - there just isn't enough space at the current location.
"We've been cramped for several years," she said.
"In the wintertime we have a lot of elderly people with
very large motor homes and you can't turn around in 10 feet."
Another company using the program is RWA Consulting, a Naples-based
engineering company. Owner Emilio Robau said he has an office
on Colonial Boulevard in Fort Myers but is looking to make
a bigger move into the Lee County market.
He's buying two adjacent buildings on McGregor Boulevard
on the edge of downtown Fort Myers and will gradually expand
there - leasing out the excess space at first.
Robau wants to spiff up the structures to improve their appearance
and help with the city's downtown redevelopment plan. "I
view that site as really having the potential to make an architectural
statement that stands the test of time. I want something that's
right and tasteful."
The RDC loan will help him accomplish that. "I'm not
a powerful, deep-pocketed developer," he said. "I'm
just a guy trying to accomplish something."
LOAN PROGRAM
WHAT: Southwest Florida Regional Development
Corp.
PURPOSE: Arranges loans for local businesses
to expand and provide more jobs
WHERE: 13180 North Cleveland Avenue - Suite 232, North Fort Myers 33903
PHONE:239-652-5588
INTERNET: e-mail admin@srdcorp. org or go
to www.srdcorp.org
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