QUESTIONS AND ANSWERS ABOUT MVEDC'S LOAN PROGRAMS FOR SMALL BUSINESSES
What are the small business programs of MVEDC?
MVEDC provides financing under three key programs:
- State of Ohio "166" program which provides low rate, fixed asset loans, usually in a shared collateral position with participating bank.
- SBA 504 loan program which provides second position loans for fixed asset projects.
- Mahoning Valley Industrial Loan Fund which provides funds for fixed assets and working capital needs.
- USDA/ AG Intermediary Relending Program (IRP) provides funds
for fixed assets and working capital needs.
Who is eligible for MVEDC funds?
Most small businesses; however, applicants are reviewed on an individual basis.
What can MVEDC loans funds be used for?
Acquisition of equipment and real estate; renovation of existing buildings; working capital requirements.
Is there an "employment" requirement for MVEDC financing?
A project must create and/or retain employment positions.
Is MVEDC financing a replacement for bank financing?
No. MVEDC works in conjunction with private lenders. Typically, a private lender will lend up to 50 percent of the total project cost.
Does MVEDC require the business to provide equity?
Yes. The small business is generally required to provide at least 10 percent equity.
How much can MVEDC lend?
Depending on the financing program, MVEDC can lend up to $1 million.
What does a "typical financing package" look like?
- 50 percent private participation
- 40 percent MVEDC participation
- 10 percent equity investment
How long does the MVEDC loan approval process take?
Financing approval takes between 30 to 45 days depending on availability of applicant information and lender commitment.
How long does MVEDC take to disburse funds?
Depending on the financing program, disbursement usually occurs within 60 days of approval. SBA 504 and "166" programs may require interim financing by participating lender.
What are the advantages of MVEDC financing programs?
MVEDC provides long-term, fixed-rate financing at interest rates which are lower than conventional financing.
SBA 504 loans are subordinated to the lender's loan to improve collateral coverage and thus encouraging the lender to offer more favorable financing terms.
MVEDC loans have low, fixed interest rates and longer terms which provide a lower debt service on overall financing and decrease cash flow burden.
