Question 1

If I build new on a Cape Coral lot, how much of the building does my business have to occupy?

Accepted Answer

More than most builders assume, and the rule is stricter for new construction than for an existing building. Federal SBA rules require your business to occupy at least 51% of an existing building. For new construction, the floor is higher: your business must occupy at least 60%, and no more than 20% of the project may be permanently leased to others, with the remaining space carrying a 3-year or 10-year absorption plan (13 CFR 120.131). "Buy at 60% occupancy and lease out the rest" is not how the rule works for new construction, so size your build to the space your business actually needs, or plan the absorption schedule with your lender up front.

Question 2

What do Cape Coral's Utilities Extension Project assessments do to an SBA project budget?

Accepted Answer

They're a separate line item from your loan and can run into five figures per lot, so get the number before you set your project cost. Cape Coral extends city water, sewer and irrigation through its Utilities Extension Project and assesses the cost to each lot: a standard lot in the completed North 2 phase carries about $19,382 in combined line-extension assessments and capital facility expansion charges, while a standard lot in the North 1 East phase approved in November 2025 runs closer to $32,288 before grant offsets. Neither figure includes the private cost of connecting to the line or decommissioning a septic system. Ask which side of the UEP line your lot sits on before you lock a construction budget for an SBA 504 project, since an unassessed lot has that cost still ahead of it.

Question 3

Does the FEMA 50% rule affect an SBA purchase of an older commercial building in Lee County?

Accepted Answer

It can, if the building sits in a Special Flood Hazard Area and needs substantial repair or improvement. Under the National Flood Insurance Program, once repair or improvement costs reach 50% of a structure's market value, the building has to be brought into current flood elevation compliance, in practice elevate or demolish. That threshold is tested against the structure's market value, not its tax-assessed figure, so an older Fort Myers or Cape Coral commercial building priced for a quick renovation can turn into a much larger project once you're past that line. Pull the flood zone and, if applicable, the elevation certificate before you underwrite the rehab scope of any SBA acquisition on flood-zone collateral, and budget for an independent appraisal if you're working close to the threshold.

Question 4

How much should I budget for property insurance and taxes on an owner-occupied Lee County building?

Accepted Answer

Plan on a total city millage between roughly 10.9 and 16.5, plus an insurance line that's cheaper here than in Naples or Miami but still real. Lee County's 2025 taxing district millage book puts the total 2025 rate at 15.3806 mills in Cape Coral and 16.5034 in the city of Fort Myers, the highest city rate in the county; unincorporated Lehigh Acres runs lower at 10.9125, though its fire district funds through a separate non-ad valorem assessment the millage book doesn't capture. On insurance, Florida's regulator put Lee County's average homeowners premium including wind at $3,576 as of March 2026, well below Collier County's $5,534 or Miami-Dade's $5,975, though a commercial policy on your building will price separately. Flood coverage is a separate policy on top of either number, and we could not verify current flood premium levels from a primary source, so get an address-specific quote before you close.

Question 5

Are SBA loan fees still waived, the way they were in FY2025?

Accepted Answer

No. SBA fees were reinstated for FY2026, and any claim that they're waived is stale. For loans approved between October 1, 2025 and September 30, 2026, 7(a) upfront guarantee fees run 2% to 3.5% or more depending on loan size, up from 0% under $1 million during the prior fiscal year, and 504 upfront fees moved to 0.50% with the annual fee cut to 0.209%. Small manufacturers keep a break: 0% upfront on 7(a) loans of $950,000 or under, and waived 504 fees. This is a national SBA program rule rather than a Fort Myers-specific one, so confirm the current fee schedule with your lender before you price a Lee County project.

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