Regional 166 Loan Program
The Regional 166 loan program provides your client with a low, fixed interest rate. To find out how the Regional 166 loan program can be incorporated into your client’s project, click on the questions below:
What does the typical Regional 166 loan structure look like?
|
Source |
Project |
Lien |
Rate |
Limits |
Term Real Estate |
Term Mach-inery/ Equip. |
|
Bank |
50% |
Shared 1st |
Market |
None |
Market |
Market |
|
166 Loan w/ WCDC |
40%* |
Shared 1st |
Fixed at 2/3 prime
** |
Min $35k
Max $350k |
Up to 15 yrs*** |
Up to 7 yrs*** |
|
Borr-ower |
10% |
|
|
|
|
|
*75% in certain locations
**1/2 Prime in certain locations
***for the Regional 166 loan, WCDC will match the term set by the bank
Generally, the bank also provides interim or “bridge” financing for the Regional 166 commitment. The private lender funds during construction. Then upon project completion, the Regional 166 loan 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?
The small business is required to contribute 10% of the project’s total cost. (back to top)
What kinds of businesses are eligible?
Eligible businesses must be a manufacturing or distribution concern. In addition, those businesses must be owner-occupied, for-profit, and located within the State of Ohio. (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 ODOD put on the participating lender?
Because of the shared 1st lien position, the Regional 166 loan will match the term of the private lender. There are no requirements on the rate of the private-lender financing. (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 Regional 166 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 Regional 166 loan. Funds from the Regional 166 loan will be disbursed directly to the interim lender on the closing date. Upon funding, the borrower will have two notes, one with you and one with us. (back to top)