Fixed asset loans up to $2M from State of Ohio

Summary – 166 Direct Loan Program

The State of Ohio’s Department of Development can loan money directly to business through its 166 Direct Loan program.  Manufacturing and many other non-retail business are eligible.  Eligible uses for the funds include the following fixed assets: new building construction, building purchase, and the purchase of machinery and equipment.  See Program and Application Guidelines for more details.

Terms

Amount of loans: typically $350,000 – $1 million (can go higher).  A bank has to participate in the deal, and the amount of the direct loan cannot usually exceed 30% of the total deal (fixed asset portion).  Rate is fixed for term (which is negotiable), and currently the rate is 3% (although depending on the size of the deal can also be negotiated).  There has to be significant job creation and retention.  Prevailing wage does apply to construction, so this loan is most often used for building acquisition and/or machinery purchase on a cost basis.  It’s also important to note that this is takeout financing.  See Program and Application Guidelines for more details.

Process

Chamber can assist with the application and approval process. The process usually involves an initial meeting with Michelle Miller, Business Development Representative, from the Ohio Department of Development, and Kevin Carver, Governor’s Regional Economic Development Director.  After an initial meeting (which we can set up), a company is given access to fill out an application out online (the Financial Assistance Application or FAA, which we can help review).  The company then appears before the internal loan committee, called the Development Financing Advisory Council or DFAC, which meets once a month, typically on the fourth Monday of the month.   You can contact Chamber VP of Economic Development David Zak at dzak@greaterspringfield.com or 937.631.5315 to begin the process or go direct. Michelle’s and Kevin’s contact information can be found here.

Comments

This is a good program when you don’t have construction as part of the project or if the project is in an area where prevailing wage doesn’t matter.  See this note on new prevailing wage guidelines issued October 15, 2008.  The process can take two months or so from the time you submit a complete application, so 70-90 days is a good estimate.  To see all 8 ODOD loan and bond programs, click hereHere’s the most recent (end of March) awards of 166 funds (not the Logistics and Distribution ones…keep going).

Benjamin Steel received a $500,000 166 Loan (2005): http://tinyurl.com/q24fw9

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: