Allen County Revolving Loan Fund
Not only does the Allen County Revolving Loan Fund (RLF) provide your borrower with a low, long-term fixed interest rate, but it also helps protect the bank’s first-lien position. And since these funds are repaid back into the RLF, the money stays in the community to be relent to other local businesses. To find out how the Allen County RLF can work for you and your clients, click on the questions below:
What does the typical Allen County RLF structure look like?
|
Source |
Project |
Lien |
Rate |
Limits |
Term Real Estate |
Term Mach-inery/ Equip. |
|
Bank |
50% |
1st |
Market |
None |
Market |
Market |
|
Allen Co. RLF |
40% |
2nd |
Fixed at 2/3 Prime |
Min $5,000
Max $500,000 |
Up to 15 yrs |
Up to 10 yrs |
|
Borr-ower |
10% |
|
|
|
|
|
Generally, the bank also provides interim or “bridge” financing for the Allen County RLF commitment. The private lender funds during construction. Then upon project completion, the Allen County RLF funds, and the bank ends up with 50% loan-to-value on the project collateral. (back to top)
How much is the typical down payment?
Generally, the small business contributes 10% of the project’s total cost. (back to top)
What kinds of businesses are eligible?
Businesses in a variety of industries are eligible, including manufacturing, distribution, health care, agri-business, retail, and service. These businesses must be the primary occupant of the financed property, must be for-profit, and cannot be engaged in speculation or investment in rental properties. Eligible business must also be located within Allen County but outside the Lima city limits. (back to top)
Can a borrower take out multiple loans for the same project?
Yes. Often times, a borrower will utilize multiple loans to meet its financing needs. In some cases, a business may also be eligible for multiple loans from the same program, such as two SBA 504 loans, one for real estate and one for equipment. (back to top)
What conditions does Allen County RLF put on the participating loan?
None. The private lender is free to set their own terms and loan conditions. The Allen County RLF will match those conditions for its loan as closely as possible. (back to top)
What is the banker’s role in this process?
Your role is simple. You process the commercial loan as you would any other loan request, and we will take care of the rest. WCDC will work with you and your client to coordinate the most cost-effective and efficient processing of the Allen County RLF loan. We will make sure the proper documents are assembled and the application is completed. From there, approval usually takes about 2 weeks. (back to top)
What happens after approval?
After approval, the bank funds the project in the interim until it is completed. Once the project is finished, you’ll be asked to provide copies of loan documents and draw schedules (when necessary), and to agree to provide 60-days notice of any default/foreclosure proceedings. Once those conditions are met, WCDC will schedule a closing with the borrower. (back to top)
What happens after closing?
After the project is complete, WCDC will fund the Allen County RLF. Funds from the Allen County RLF loan will be disbursed directly to the interim lender on the date of closing. Upon funding, the borrower will have two notes, one with you and one with Allen County. (back to top)