The Authority MicroLoan Program is designed for businesses that may be unable to obtain financing through “traditional” sources due to:
Age of the Business
Purpose of the loanLack of Performance History
Lack of Collateral
Declination: In order to utilize the MicroLoan Program, a business owner must provide a declination letter from a conventional financing source.
Loan Amounts: The loan amount can be up to $25,000. Under no circumstances will the aggregate dollar amount lent to any one borrower exceed $35,000.00. The intent of the Program is to serve requests normally below the lending levels of traditional financing sources.
Interest Rates: Interest rates will usually be fixed for the term of the loan and will be priced at the lowest Wall Street Journal Prime Rate plus 2% with a floor of 6%.
Length of the Loan: The maximum term of any one loan shall depend upon the needs of the borrower and the collateral offered as security, but will not in any case exceed 84 months. Based upon the established business plan and cash flow of the borrower, the amortization of the loan may be up to 120 months, but the loan will still mature in 84 months.
Loan Security: The Authority will require a secured position in the assets being financed; however, the Authority may also take a security interest in other assets of the borrower. The Authority will also require personal guarantees from the principals of the borrowing entity.
Loan Fees: The Authority will charge a loan origination fee of one percent (1%) of the loan amount and require the borrower to reimburse all expenses incurred as a result of the loan process.
- Business must be a “for profit” business.
- Business must meet the U.S. Small Business Administration (SBA) business size standards.
- Credit reports must meet Authority approval.
Use of MicroLoan Fund Proceeds:
- Can be used for working capital and other short-term cash flow needs.
- Can be used to acquire inventory, materials, supplies, furniture, fixtures and equipment.
- Loans will be considered for all legal businesses but will exclude residential, news media, financial institutions and other types of businesses ineligible according to U.S. SBA standards.
- Proceeds cannot be used for any illegal purposes or for the purchase of commercial or residential real property.