BCEDA MICRO LOAN PROGRAM

OVERVIEW

Micro business loans are available for industrial or technology oriented businesses

INFORMATION SHEET

 BCEDA provides micro business loans for industrial or technology oriented businesses up to $20,000.  The service area for this program is Baldwin County.   The money borrowed under this program can be used for the purchase of machinery, equipment, furniture, fixtures, inventory and working capital.  The loan cannot be used to pay existing debts.  The term of the loan will depend on the amount borrowed, the use of funds and the collateral offered.  As a loan applicant, you must demonstrate good character, acceptable credit, enough management expertise and commitment for a successful operation, and show that there is a reasonable assurance that the loan will be repaid.

LOAN QUALIFICATIONS

1. Business Ventures:  a.  Corporations; b.  Partnerships;
c.  Sole Proprietorships

2. Public Authorities and Public Bodies and Tribal Authorities.

TYPES OF PROJECTS/ACTIVITIES ELIGIBLE FOR RLF FUNDING

Projects include, but are not limited to: Industrial Development; Small Business Expansion; Small Business Start-Ups; Business Incubators; Business, Industrial, and Technology Infrastructure; and Training Facilities.  

Activities include, but are not limited to:  Acquisition, or construction of industrial and commercial buildings and structures; Purchase of capitalized machinery and equipment with a useful life of at least five years; Acquisition of real property for economic development purposes only; Rehabilitation of deteriorated buildings occupied by the borrower.

TYPES OF FINANCING AVAILABLE

Fixed Asset Financing:  Land, buildings, equipment, office and work equipment. Infrastructure improvements. 

Working Capital Financing:  Available in a limited amount.

LOAN TERMS AND CONDITIONS:  The maximum amount of a single loan may not exceed $20,000 and the minimum loan amount is $500.  Interest Rates:  The maximum interest rate for loans made from the RLF is the prime rate plus two points as published in the Wall Street Journal on the date of loan closing.  Generally, dependent of loan security, loans will bear a rate that is one percent above the prime rate.  The minimum interest rate will be prime.  Repayment Terms:  Repayment terms will not exceed 3 years.  The following maturates may be used as a general guidelines:  Building-3 years; Real Estate-3 years; Equipment 1.5 years; Working Capital: 90 days to one year.

Security:  BCEDA will work with the potential borrower to determine security that is adequate for the term of the loan.  The nature of the collateral pledge by the loan application shall be determined by the BCEDA Loan Committee on a project by project basis.  Generally, security will consist of a first lien position on real property.  If the same security is used in joint financing, the RLF will require a parity position with other lenders.

Other types of security include: Letter of credit from acceptable financial institution; Machinery and equipment which has a developed market; Accounts receivable and inventory for short-term loans; Securities issued by the Federal government or its agencies; Patents.

The loan recipient will be required to maintain fire insurance and flood insurance if necessary, on secured assets.  In some cases, credit life or key man insurance will be required with the RLF as loss payee.    All loans will require a personal guarantee from the principal owner(s).  All borrowers must provide adequate collateral, submit quarterly financial statements and other items as requested for adequate monitoring.  BCEDA will pull a credit report on all principals and guarantors and may require the principals to enroll in counseling or small business courses with SCORE or the SBDC.

To Apply

Complete the application to see if you qualify for one of our loan programs and submit the following:

ALL SUBMISSIONS MUST BE SIGNED AND DATED

Return to:

BCEDA
P.O. Box 1340
Robertsdale, AL 36567
800-947-2445 251-947-4229 (fax)