Building Business In The Region? This Loan is for YOU.

Community Development Block Grant (CDBG) Loan Fund

INTERESTED IN STARTING A BUSINESS OR PLANNING TO CREATE JOBS, BUT NEED ACCESS TO CAPITAL?
The CDBG Loan Fund is available to businesses seeking capital to finance real estate, inventory, receivables, equipment and other working capital needs. Intended to encourage economic growth in small communities, job creation is necessary to qualify. Funding is available up to $500,000. For each $35,000 loaned, one full time job must be created. This is a great opportunity to grow your business and encourage community revitalization.

Overview

  • Eligible Companies:
    • Start-up through mature business; Needs some financial stability (able to pay back loan)
  • Eligible Projects: Must meet the National Objective:
    • The activities will benefit persons of low and moderate income (LMI), as defined by Section 104(b) (3) of the Housing and Community Development Act and 24 CFR 570.483;
    • LMI job creation projects must result in position creation or retention where at least 51 percent of the positions are made available to, or held by LMI persons. Typically the moderate -income level is 80 percent of the county median family income and is based on the income level of the household and not the individual filling the position. For job creation projects, the very low, low, and moderate-income requirement is applied at the time of hire. Job creation only refers to new jobs or positions to the company and the United States. Jobs are not counted unless they are hired after the effective date of the grant agreement. Positions must be hired within two years of loan closing.
  • Eligible Uses:
    • Financing and/or refinancing of real property occupied by a small business
    • Financing and/or refinancing equipment used for business purposes
    • Financing and/or refinancing of inventory and receivables
    • Financing and/or refinancing of working capital, including costs associated with activities such as engineering, sales, leasehold improvements, installation expenses, technology acquisition and enhancement activities
  • Funding Range:
    • Up to $500,000; dependent on number of jobs created within two years
  • Interest Rate:
    • Dependent on risk
  • Terms: Negotiable

Process

  • Underwriting:
    • Assess and scores application based on: business plan, financial history, credit score, and job creation
  • CDBG Due Diligence:
    • Citizen Participation – up to 30 Days
      • Part One Application is proposed by Venture North Funding & Development at regularly scheduled county commission meeting (Local Unit Of Government or County in which business is located)
        • Part One Application identifies jobs created, amount of loan, and uses of funds
        • Company and/or borrower financials are only reviewed by RLF Loan Committee
      • 15 Day (calendar) Public Participation
        • Allow all county residents to inquire about proposed project via email, phone or at public hearing
      • Part Two Application (adopted by county after 15 day public participation)
      • Environmental Review
      • Background Check
  • Decision Making:
    • The Project must be approved by county during the Part One & Two Application (process identified above).
    • MEDC must confirm the project meets HUDs National Objective and the use of funds are eligible.
    • CDBG Loan review committee makes final recommendation. (Meets on an as needed basis)
      • Loan Committee Evaluation:
        • the business’ need for financial assistance;
        • the feasibility of the proposed venture or business activity;
        • the past business experience of the applicant;
        • the reasonableness of the proposed costs and return to the applicant;
        • the commitment of other sources of funds; and
        • the ratio of the loan amount to the full-time equivalent jobs expected to be created.

For Details, Contact

Laura Galbraith
laura@venturenorthfunding.org
(231) 995-7110

venturenorthfunding.org

Formerly the Traverse Bay Economic Development Corporation and Chamber Foundation