Business Finance and Incentives

Economic Development Administration
Revolving Loan & Real Estate Fund

OVERVIEW

The primary objective is to create new jobs that pay competitive wages and benefits, with real opportunity for advancement; and to retain jobs that otherwise would be lost to the distressed communities of the city.

Funds for the EDA program are provided by the U.S. Department of Commerce Economic Development Administration. Borrowers are required to comply with the federal statutory requirements that apply to activities carried out with EDA funds. The most common of these requirements relate to environmental protection, civil rights, Davis-Bacon wage rates, handicap access to construction projects, and the prohibited use of funds for business that relocate jobs from one commuting area to another.

Eligible Purpose

This program is designed to assist new and existing small businesses citywide by providing financing to bridge the gap between project cost and private financing.

Primary objectives of the program are to assist in the creation of wealth within economically distressed communities, increase credit-worthiness of marginal clients so they can attain private sector financing, and increase minority and women ownership of businesses citywide.

Service Area

Citywide, with emphasis placed on distressed communities.

Loan Program Guidelines

• Loan amount is generally up to $150,000; $250,000 with real estate.
• One job for every $25,000 loaned.
• Interest rate: generally below market.
• Fee: 1% of amount borrowed.
• The loan term varies. Normally up to seven years with the possibility of the first six months of loan payments deferred to allow start-up companies to build a cash cushion. However, interest on the accrued loan must be paid during the deferred period.
• Borrower must provide a minimum of 10% of total project cost.
• Borrower must have reasonable credit.
• Principals of the business are required to have industry experience.
• Personal guaranties of all owners with greater than 20% ownership.

The program encourages public/private investment ratio of 1:1 or better.

For more information call us at 503-823-3321 or email Neal Fitzgerald..

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