Writer: Max Crampton-Thomas
2 min read February 2021 —The Florida Business Development Corporation helps small businesses obtain Small Business Administration (SBA) 504 loans, which provide better terms than they would receive from conventional lenders. President and CEO Bill Habermeyer spoke with Invest: about the organization’s impact on the Tampa Bay region and its role in economic development.
What role does the Florida Business Development Corporation play in the Tampa market?
We’re a Small Business Administration (SBA) lender. We administer the SBA 504 loan program. It’s primarily used for the acquisition of commercial real estate, as long as that acquisition is going to house the employees of that business. The main focus is helping business owners obtain better terms than those available from conventional credit markets. Our focus in Tampa is to ensure the small business and lending community are utilizing these programs. As it is a national program, you can identify real, deep disparity between certain parts of the country that use the SBA programs and certain others that do not. A lot of times, it comes down to who is administering it in those local areas. For instance, the state of Florida, and Tampa specifically, has widespread utilization of our loan program, second only to California. Texas is the second-most populated state in the country and program utilization is nowhere even close to the level of utilization in Florida. This is largely due to our ability to administer the programs we offer with greater cost and certainty.
How did your program handle the need among small businesses for outside funding?
Ever since the pandemic kicked into high gear in March, our core business has increased in volume exponentially, outside of PPP loans. It is one of those instances where our COO and I were looking at adjusting our budgets for the next half of our fiscal year, worried no one was going to get loans or buy real estate. It turned out to be the exact opposite. We’ve seen a sizable increase in loan volume and demand for us despite the pandemic. Commercial real estate rates are at their lowest since at least 2003. Our government-guaranteed rates are lower than the cost of funds at a bank. Some businesses are going to gain from this and be able to pick up a piece of real estate at a better deal. We also haven’t seen any depressed real estate values.
What role do you play from an economic development standpoint?
We look at our program as a small-balance economic development program. We think that by executing our core business, we’re helping economic development on a day-to-day basis. Our program provides better terms than those available in the commercial credit markets. The theory behind it is that if we provide better terms, it will lead to a positive impact on credit uncertainty and ultimately create job retention and growth.
What do you think this experience taught businesses about flexibility?
If you look at Tampa specifically, it has been a very collaborative effort to pivot and to allow new ways of thinking. We finance numerous bars and restaurants so when bars closed down, a lot of bar owners put food trucks on their site, while restaurants with alcohol licenses provided alcoholic beverages on a to-go model. It shows there is some real resilience within the small-business community. They’re not going to let this unprecedented time hold them back. People are looking to avoid spreading the virus and are bonding together, shutting down streets so restaurants can have outdoor areas. We hear these kinds of stories on a daily basis in Tampa, St. Pete and Tampa Bay.
What is your near-term focus?
Our constant focus is on doing a better job providing access to capital with the 504 loan program. When we realized we could execute remotely, we started hiring people in analytical roles from throughout the country. We recently added three employees in California and one in Chicago. It enabled us to constitute an all-star team so that we can meet our drastically increased demand. We had invested heavily in remote technology so we didn’t lose our sense of corporate culture, togetherness and working for one another. Our challenge will be finding ways to remain cohesive. Understanding that and implementing the right tools via technology will help us conquer that challenge.
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