Mercantile Capital Corporation Announces New Public-Private Partnership with Small Business Administration (SBA) and U.S. Treasury Dept.
Firm Set to Rename SBA 504 Loan Program as Part of Transaction
ALTAMONTE SPRINGS, Fla. — Mercantile Capital Corporation (formerly known as Mercantile Commercial Capital, LLC) chose its first operating day as a new entity to announce a landmark new federal program for the nation’s small business owners.
After months of closed-door negotiations with government officials, the Orlando-area based commercial lender has agreed to assume and service the small business loan portfolios of now defunct Wall Street firms, Lehman Brothers and Bear Stearns – both of which originated hundreds of millions of SBA 504 loans over the past decade. Moreover, for an undisclosed sum, Mercantile will be granted “preferential status” in providing SBA 504 loans nationwide and given “naming rights” for the SBA 504 loan program. In a unique “swap-arrangement” that demonstrates the Obama Administration’s creative spirit in working with the private sector and a need to raise revenues for the Treasury, Mercantile will maintain the servicing for these 504 loans, while the SBA confers to Mercantile the option to provide all SBA 504 first mortgages for the remainder of fiscal year 2009 and all of fiscal year 2010. Along with this groundbreaking exclusivity, Mercantile has 30 days in which to change the poorly named “504” moniker.
“This is obviously a very big day for Mercantile,” said Chris Hurn, Chief Executive Officer of Mercantile. “We spent a considerable amount of time and capital to negotiate this deal – to service what may turn out to be ‘toxic’ assets from failed financial institutions, but in exchange we’ll become the SBA’s exclusive provider of 504 first mortgages and get to rename the program for the next 18 months,” Hurn stated.
Hurn’s business partner and the Chairman of Mercantile, Geof Longstaff, was equally effusive, “Our standing as one of the nation’s leading 504 lenders positioned us as the ‘go-to players’ to get this deal hammered out. The government wanted experts like us to take care of these specialized loans and was willing to let us take the lead in thawing-out the frozen small business lending industry.”
“The fact that we’ll get to rename the SBA 504 within the next 30 days was simply icing on the cake for us,” said Hurn.
Treasury spokesman, Dr. Lopo Flairs, commented, “The new Administration has chosen to be more creative – to throw the proverbial box out the window. This deal with Mercantile is a good example, as it accomplished our administrative needs while raising needed funds. The fact that the 504 loan program will get a new name for a few years is actually a plus for all parties involved. No one really knows why it was ever called that in the first place. This situation is really not unlike naming rights to a professional sports stadium, NASCAR sponsorships on their cars, or European soccer players with logos on their jerseys. We believe this is a good deal for America’s taxpayers.”
Hurn said he hasn’t yet decided on a new name for the 504 loan program, but since the program champions America’s small businesses and entrepreneurs with the smartest financing available when purchasing commercial property, he is said to be leaning toward calling these loans “The SmartChoice commercial loans.” Acting SBA Administrator Daryl Hairston and the soon-to-be confirmed SBA Administrator, Karen Gordon Mills, are also working with Hurn to appropriately rename the program.
Hurn and Longstaff will be leaving early today to join the leaders of the G-20 Summit in a just-added presentation on international small business growth. President Obama invited these two small business loan experts to London to educate this illustrious group about successful small business wealth creation. Both men are expected back in Orlando by early Saturday.
SBA 504 loans offer small business owners up to 90 percent financing at substantially reduced rates to develop, acquire, and remodel commercial facilities.
Mercantile Capital Corporation, formerly Mercantile Commercial Capital, LLC, ranks as the one of the most active providers of SBA 504 financing in the nation and has become quite well-known and decorated in their industry with such honors as being a member of the Inc. 500 list of America’s fastest-growing companies, being named “Banker of the Year,” and just last year, being named “Best Small Company in Central Florida.”
* * *
For more information contact
Chris Hurn, CEO, Mercantile Capital Corporation, 407-786-5040
Geof Longstaff, Chairman, Mercantile Capital Corporation, 407-786-5040
Shannon D. Marks, President/COO, Mercantile Capital Corporation, 407-786-5040