Financial Development Incentives

Federal Programs

SBA 504 Program Type   Direct loan to business Eligible Businesses   Retail, commercial, manufacturing, distribution or service Size Standards   Net worth below $6 million; annual income below $2 million Use   Land acquisition and improvements, purchase or remodeling of a building, construction of or addition to a building, purchase of machinery or equipment, leasehold improvements Maximum   40% of project cost, up to $750,000 ($1,000,000 for targeted projects) Term   10 years for equipment, 20 years for real estate Rates   Tied to Treasury Bonds; T-Bonds plus 1.5%, fixed rate Equity   Minimum 10% equity investment Job Creation   One job for each $35,000 of 504 financing (may be waived for rural development projects, which meet public policy goals) Bank Loan   50% of project cost; fixed or floating rate; minimum seven (7) year term on equipment and ten (10) year term on real estate Fees   $500 application fee; up-front processing: 2.875%; annual: .60% servicing fee; closing: maximum $2,500 Contact: Gary Seeley, Executive Director Enterprise Development Corporation 9030 Hocking Hills Drive The Plains, OH 45780 phone: 740-797-9646 · fax: 740-797-9659     SBA Contract Loan Program Type   Direct loan to business Eligible Businesses:   Construction contractors, general or special trade; manufacturers and service contractors with an assignable contract are eligible; must be in operation for 12 months before the date of the application Size Standards   Must have fewer than 500 employees Use   Finance labor and material costs for one contract; cannot be used to finance receivables or inventory Maximum   Up to $155,000 guaranteed at up to 90%; up to $750,000 guaranteed at up to 85% Term   Typically a 12 month term; large contracts may be approved for 18 months by the District Director Rates   Interest rate set by the bank, not to exceed the maximum rate set by SBA Equity   Assignment of the contract proceeds is required as collateral; pledge of outside assets and secured personal guarantees are usually required Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Defense Loan and Technical Assistance Program Type   Guaranteed Loan Eligible Businesses:   Defense-dependent small firms adversely affected by defense cuts Size Standards   Net worth below $6 million; annual profits below $2 million Use   Financial and technical assistance to help defense-dependent firms diversify into commercial market Maximum   Varies depending on 7 (a) or 504 participation; tied to Treasury Bonds; T-Bonds plus 1.5%, fixed rate; negotiable with lender; maximum 2.75% over prime Term   $1.25 million (total loan amount) Rates   Varies depending on 7 (a) or 504 participation; tied to Treasury Bonds; T-Bonds plus 1.5%, fixed rate; negotiable with lender; maximum 2.75% over prime Bank Loan   Required Fees   Guaranty fee paid by lender (may be passed on); based on maturity amount of SBA exposure Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Export Working Capital Program Type   Guaranteed loan Eligible Businesses:   Small business exporters who need short-term working capital Size Standards   Net worth below $6 million; annual profits below $2 million Use   Short-term working capital loans for exporters Maximum   $750,000 (may be combined with International Trade Loan); maximum guarantee $750,000 ($1 million in some cases); private lender unlimited Term   Matches single transaction cycle or generally one year for line of credit Rates   No cap Fees   Paid by lender (may be passed on); based on maturity amount of SBA exposure Contact: US Small Business Administration (SBA) Federal Building, US Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Small General Contractor Loans Type   Direct loan to business Eligible Businesses   Must be a construction contractor or homebuilder Size Standards   Must have fewer than 500 employees Use   Must be used only for direct expenses of the project; rehabilitation projects also qualify if, at the time of loan application, the estimated costs are equal to or more than a third of the purchase price or the fair market value of residential or commercial buildings at the time they are offered for sale; may also be used to purchase vacant land if the price is no more than 20% of the total loan; no more than 5% of the loan can be used for streets, curbs and other development costs that benefit properties other than the one being built or rehabilitated. Maximum   Up to $750,000 Term   Thirty-six (36) months, plus a reasonable estimate of time it takes to complete the construction or renovation; principal repayment may be required in a single payment when the project is sold, interest payments are required at least twice a year and must be paid from the applicant's own resources not from loan proceeds Rates   Prime rate plus 2.25% Equity   Loans must be secured by not less than a second lien. The total amount of the first and second liens cannot exceed 80% of the contractor's anticipated selling price. Job Creation     Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Guaranty Loan 7 (a) Type   Partial loan guarantee Eligible Businesses:   Retail, commercial, manufacturing, distribution or service Size Standards   Must have fewer than 500 employees Use   Working capital; acquisition of supplies, inventory or fixed assets; financing of contracts Maximum   $750,000 guaranteed at 75% (80% if total loan is $100,000 or less) Term   5 to 10 years for working capital; up to 25 years for fixed assets (not to exceed life of equipment) Rates   Negotiated, up to prime rate plus 2.75%; may be fixed or variable Equity   Start-ups must have 20% to 30% equity investment; more is required on higher risk businesses; requires a personal guarantee Bank Loan   Required; application is submitted through a private lender Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Guaranty Loans 7 (a)-LowDoc Type   Partial loan guarantee Eligible Businesses:   Retail, commercial, manufacturing, distribution or service Size Standards   Start-ups; businesses with $5 million or less annual sales for the past 3 years; employ 100 or fewer Use   Working capital; acquisition of supplies, inventory or fixed assets; financing of contracts Maximum   $100,000 guaranteed at up to 80% Term   Not to exceed 25 years for fixed assets; 10 year maximum for all other uses Rates   Negotiated, up to prime rate plus 2.75%; may be fixed or variable Equity   Start-ups must have 20% to 30% equity investment; more is required on higher risk businesses; requires a personal guarantee Bank Loan   Required; application is submitted through a private lender Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA International Trade Loan Program Type   Guaranteed loan Eligible Businesses:   Small businesses engaged or preparing to engage in international trade or adversely affected by competition from imports Size Standards   Start-ups, businesses with $5 million or less annual sales for past 3 years; employ 100 or fewer Use   Combination of working capital and fixed-asset financing; improvements in U.S. for producing goods or services; may not be used to pay existing debt Maximum   $1.25 million; varies depending on whether done under 7 (a) or 504; 75% guarantee under 7 (a); 40% of the project (100% SBA-backed debenture) Term   Up to 25 years Rates   Negotiable with lender; maximum rate 2.75% over prime Fees   Paid by lender (may be passed on); based on maturity amount of SBA exposure Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Pollution Control Loan Type   Partial loan guarantee Eligible Businesses:   Most for-profit small businesses Size Standards   Must have fewer than 500 employees Use   Pollution Control Loans are intended to provide loan guarantees to eligible small businesses for financing of the planning, design or installation of a pollution control facility. The facility must prevent, reduce, abate or control any form of pollution, including recycling. Maximum   Up to $1,000,000 guaranteed at 75% Term   Maximum term is 25 years Rates   Prime rate plus 2.25% to 2.75% Equity   Holders of at least 20% ownership in the business are generally required to guaranty the loan. Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     SBA Seasonal Line of Credit Type   Partial loan guarantee Eligible Businesses:   Small firms needing a loan due to seasonal increase in business activity; must have been in business for at least 12 months; this program is for those contractors who cannot obtain bonding elsewhere Size Standards   Must have fewer than 500 employees Maximum   Up to $100,000, guaranteed at up to 80%; up to $750,000 guaranteed at up to 75% Term   Up to 5 years Rates   Maximum prime rate plus 2.75% Equity   Required; loan secured from private lender Contact: U.S. Small Business Administration Chicago Regional Office 230 Dearborn Street, Room 510 Chicago, IL 60604-1593 phone: 312-353-7331     SBA Small Asset-Based Loan Program Type   Direct loan to business Eligible Businesses:   Most for-profit businesses Size Standards   Must have fewer than 500 employees Use   Working capital to meet seasonal increase in business Maximum   Up to $200,000 Term   Up to 5 years Rates   Maximum is 2.25% above Prime Equity   Collateral is primarily liens on all inventory and accounts receivable Bank Loan   Pledge of outside assets and personal guarantees may be required Contact: U.S. Small Business Administration Federal Building, U.S. Courthouse 85 Marconi Blvd., Room 512 Columbus, OH 43215 phone: 614-469-6860     USDA Business & Industry Loan Guarantees Type   Partial loan guarantee Eligible Businesses:   Most for-profit businesses; exceptions and ineligible purposes include charitable institutions, churches and fraternal organizations, lending and investment institutions, insurance companies, race tracks, golf courses and revolving lines of credit Use   Up to 80% loan guarantee for acquisition of real estate, machinery and equipment or term working capital Maximum   $10,000,000; $25,000,000 under limited circumstances Term   Maximum is 7 years for term working capital; 15 years for machinery and equipment; 30 years for real estate Rates   Fixed or variable Equity   Minimum is 10% tangible balance sheet; Start-ups should have tangible book equity of 20% - 25% Job Creation   Goal is $40,000 of loan guarantee for each job created or retained Bank Loan   Collateral: Must be sufficient to protect the interest of the lender and USDA; generally personal guarantees are required Fees   A one-time guarantee fee, equal to two percent (2%) of the guaranteed portion of the loan is due at the time the guarantee is issued