Whether you are a small entrepreneur, an owner of a long established retail store or a small manufacturer located, or willing to locate in Greenup, Kansas, Mattoon, Martinsville or the Toledo area, those Cities' Low Interest Development Fund may be just what you need to insure healthy profits based on investments. The fund represents the ideal partnership between the Cities' and its business firms. Funding initially awarded by the State of Illinois, matched by conventional bank/owner equity financing, results in a program that will make available below market financing to qualified business firms.
HOW IT WORKS
The revolving loan funds administered by the CCRP & DC are geared toward private sector firms in Greenup, Kansas, Mattoon Martinsville or the Toledo area. Use of loan funds are for real property improvements, equipment, and working capital. City financed projects must also retain or create a significant amount of private sector jobs. Certain federal/state restrictions may apply depending on the nature of the proposed project.
An example of the RLF Program is the following structure for the City of Mattoon:
(Please contact the CCRP&DC for the structure of the other cities' RLF programs)
A. Minimum/Maximum Loan Amount: $2,500 - $100,000
B. Term of Loan: 7 to 20 years depending on what is financed.
C. Matching Requirements: $2.00 in bank/owner funds committed for every $1.00 of Development Funds committed for projects $50,000 and over. A "one to one" match is required for projects under $50,000.
D. Job Criteria: One (1) permanent private sector job retained or created for every $10,000 of City funds committed.
E. Collateral Requirements: Determined by participating bank(s).
F. Start-Up Businesses: Start-up businesses must inject owners equity totaling at least 20% of a project's total cost in the form of a financial contribution.
G. City Fund Interest Rate: Currently 3%
H. Bank Fund Rate: Current Market rate or below depending on cost funds; fixed or floating basis.
I. Typical Deal: (Assume $20,000 cost, equipment purchase, 1 full-time job and 1 part-time job retained.)
City Funds: $10,000 at 3%
Bank Funds: $10,000 at 9%
TOTAL: $20,000 at 6% for 10 years.
Equals $223/mo (a savings of $3,600 over a 10 year period compared to conventional financing of $20,000 at 9%)
J. Equity Deals: Businesses may elect to obtain RLF financing only. In this case, business owner(s) must inject $1.00 for every $1.00 of City money. Example: (Same as above but without bank participation)
City Funds: $10,000 at 3%
Equity Funds: $10,000 cash
TOTAL: $20,000
(debt service on $10,000 loan, 3% at 10 years = $96.57 / month)
K. Application Process: Interested businesses should pick up the application and guidelines at the Coles County Regional Planning and Development Commission. Applications are then submitted for review first by the participating lender and then by the respective Revolving Loan Fund Committee. Estimated review/approval time is 30 to 60 days.
FOR FURTHER INFORMATION
For further information contact City Hall or the Coles County Regional Planning and Development Commission at (217) 348-0521.