Small Business First  (SBF)

Low interest financing for land and building acquisition and construction, machinery and equipment purchases, and working capital to businesses unable to fully finance these projects with equity, bank financing, or other private and public sources.

• agriculture enterprise, industrial enterprise, manufacturing enterprise, research and development enterprise, computer related services, construction enterprise, child day care

• defense related projects having a relationship with the U.S. Department of Defense

• recyclers of municipal or commercial waste materials

• hospitality industry project:  hotel, motel or lodging facility employers of at least five full-time employees at time of application

• restaurant or food service operators open to the public for at least five years, not necessarily under the same management, and who employ at least five full-time employees at the time of application

land and building acquisition and construction, machinery and equipment purchases and upgrades, and working capital needs

• maximum loan amount for land and building acquisition and construction, and machinery and equipment purchases and upgrades is $200,000 or 50% of the total project, whichever is less

• maximum loan amount for working capital is $100,000 or 50% of the total project cost, whichever is less

• at least one full-time job must be created or preserved within three years from the completion of the project for each $25,000 borrowed

All loan applications must be approved by a designated Area Loan Organization

• Commonwealth funded loans:  5%
• EDA Defense related loans:  4%, or 4% below prime, whichever is higher
• Real Estate term:  up to 15 years
• Machinery and equipment term:  up to 10 years
• Working capital term:  up to 3 years
• Interest rates:  annual fixed rate of 5% for loans to agricultural producers. Rates may be reduced 2% under certain circumstances if the area where the project is located has been included within a natural disaster declaration issued by the Governor
• Where two or more uses of SBF funds are planned, loan terms may be blended

• $500 packaging fee due to Economic Progress Alliance
• $550 application fee due to the Northwest Commission
• 2% application fee due to the Northwest Commission at time commitment letter is executed (max of $2,500 and min of $1,500)
• 1/2 of 1% of the SBF outstanding principal loan amount due to the Northwest Commission on anniversary of the loan

• Loans must be secured at the highest lien position available on one or more assets

•  SBF may require personal guarantees of principals

Please contact Larry Morgan for full details and assistance.