STRUCTURE, TERMS AND RATES

 

GAP FINANCING

Loan Structure - CEDA makes a direct term loan in partnership with a bank loan to increase the cash available through financing.  This arrangement reduces the required owner cash investment in new fixed assets allowing that cash to be used for other costs associated with the project, such as additional inventory and working capital. 

     Example:

 

 

 

 

 

 

 

 

Maximum Loan Amounts –

CEDA participation is limited under:

USDA-IRP—To the lesser of $150,000 or 75% of the total project cost.

EDA-RLF — To the lesser of $100,000 or 60% of the total project cost.

 

Terms - 20 years max. for real property, 5 to 7 years for machinery and equipment, and 3 to 5 years for permanent inventory. 

 

Interest Rates - CEDA loans are fixed rate loans.  The rate is set at the time of loan closing at the WSJ Prime Rate plus 1% (floor of 8.5%).

 

Fees & Closing Costs

Origination fee - 1.5% of the loan amt.($450 minimum).

The Borrower is responsible for all loan processing and closing costs.

 

Collateral - CEDA typically accepts a subordinate lien position on the same collateral that secures the bank loan. Additional collateral may be required. 

 

 

 

MICRO LOANS

 

Loan Structure & Use – CEDA

Micro-loans are term loans that are typically used to finance equipment and/or permanent inventory for start-up or expanding businesses.  An owner investment is required, the amount of which varies depending upon the project.

 

Maximum Loan Amt –  $20,000

 

Terms - 7 year max. for equipment.

         4 year max. for inventory

 

Interest Rates are fixed for the life of the loan at WSJ Prime Rate plus 2%

(9% floor).

 

Fees & Closing Costs -

Origination fee - 2% of the loan amount ($100 minimum).  

The borrower is responsible for loan processing and closing costs.

 

 

Other

 

CEDA can, under certain circumstances, act as the primary lender and finance up to 75% of the total project cost. 

 

Loan Structure

     Example:

 

 

 

 

 

 

 

The owner’s injection can include soft-costs related to the project such as architect fees, permitting costs, loan fees, etc.

 

Maximum loan amounts, terms, fees and all other rules of the Gap Financing program apply. 

 

 

 

 
Text Box: Project Costs Building Purchase ............. $ 20,000 Equipment .................... 120,000 Inventory .................... 120,000 Misc Start-up Costs ......... 60,000 Total Project ............… $200,000 Text Box: Forms to Download Technical Assistance

Clearwater Economic Development Association, Inc. is an equal opportunity provider and an equal opportunity employer.
Text Box: Business Loan Application Text Box: Information Requirements Text Box: Personal Financial Statement Text Box: Schedule of Business Debt Text Box: Financing Owner injection ............. $ 20,000 Bank Loan ...................... 120,000 CEDA Loan ................... 60,000 Total Financing ............… $200,000 Text Box: Project Cost ............. $200,000 Financing Owner injection ............. $ 50,000 CEDA Loan .................. 150,000 Total ...........… $200,000