Downtown Lima Development Loan Program
Not only does the Downtown Lima Development Loan (DLDL) program provide your borrower with a great fixed interest rate, it also helps protect the bank’s first-lien position. And like our other revolving loan programs, money repaid to the fund stays in the community to be relent to other local businesses. To find out how the DLDL can work for you and your clients, click on the questions below:
What does the typical DLDL loan structure look like?
|
Source |
Project |
Lien |
Rate |
Limits |
Term Real Estate |
Term Mach-inery/ Equip. |
|
Bank |
50% |
1st |
Market |
None |
Market |
Market |
|
DLDL |
40% |
2nd |
Fixed |
Min $1,000
Max $50,000 |
15 yrs |
5 yrs |
|
Borrower |
10% |
|
|
|
|
|
Generally, the bank also provides interim or “bridge” financing for the DLDL commitment. The private lender funds during construction. Then upon project completion, the DLDL funds, and the bank ends up with a 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?
Eligible business must be a for-profit, start-up, or expansion located within the downtown Lima defined region shown below. Contact us for specific DLDL boundaries. (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 the USDA put on the participating lender?
None. The private lender is free to set their own terms and loan conditions. The DLDL 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 DLDL 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 DLDL. Funds from the DLDL 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 Downtown Lima, Inc. (back to top)