Direct Loan Program
Eligible Loan Uses
- Real estate acquisition
- New construction
- Renovation of existing buildings
- New and/or used machinery and equipment acquisition
- Working Capital
The Benefits
- Low down payment
- Below-market interest rate
- Gap financing
Typical Financing Structure
- 60% bank or other private lender
- 30% CityWide SBA direct loan
- 10% owner’s equity injection
Maximum Loan Amount
Term
- Fixed asset: Useful life of asset up to 10 years
- Working capital: 3 years
Rate
- Rates are determined by the assessed risk
Fees
- $100 application fee
- 1.5% of loan amount (1% paid upon acceptance of commitment)
- CityWide’s out-of-pocket closing costs-i.e. legal, title, recording, etc.
SBA 504
Eligible Businesses
- The business must be a for-profit corporation, partnership, or proprietorship
- Net worth of business must not exceed $7,000,000
- Average profit after tax must not exceed $2,500,000 for the last two years
- Job creation of one job per $50,000 of SBA funds lent
Eligible Loan Uses
- Real estate acquisition
- New construction
- Renovation of existing buildings
- Machinery and equipment acquisition
- Project-related soft costs
Benefits
- Long-term financing
- Low down payment
- Fixed, low interest rates
Typical Financing Structure
- 50% bank or other private lender
- 40% CityWide SBA 504 loan
- 10% owner’s equity injection
Maximum Loan Amounts
- $50,000 - $1,500,000
- $1,500,000 - $2,000,000 if public policy goal is met
- Up to $4,000,000 if manufacturer
Term
- Real Estate – 10 or 20 years
- Machinery and equipment – 10 years
Rate
- Rates are fixed for the full term of the loan
- 20-year rate is approximately 2% above the 10-year treasury
- 10-year rate is approximately 2% above the 5-year treasury
Fees
- Approximately 2.65% of the SBA 504 loan amount, which is financed over the term of the loan
- $3,000 deposit due upon acceptance of loan commitment to cover out-of-pocket closing costs, i.e. legal, title, recording, etc.
|
