BUSINESS
SMALL BUSINESSES GET A BOOST
FROM LOCAL , STATE AGENCIES
The Frederick County Office of Economic Development , with support from County Executive Jan Gardner , announced earlier this year that a Small Business Loan Guarantee Program ( SBLG ) is available for existing and aspiring small businesses in Frederick County .
The initial funding of this program will be provided by the existing funds remaining from the Frederick County Revolving Loan Fund , which stopped issuing new loans in 2011 .
“ This is another way of showing that Frederick County means business ,” County Executive Gardner stated . “ We support our small businesses and want to give them the help they need to succeed .”
Frederick County Office of Economic Development Director Helen Propheter said that the end goal of the program is create and support job growth in the county , and to “ support jobs that pay family-supporting wages and provide more local job opportunities . This program is another tool in our toolbox that helps us achieve these results .”
The purpose of the program is to provide financing assistance for growth-related expansion projects for existing businesses and for aspiring entrepreneurs . The loan guarantee can be used for real estate , refinancing secured debt , machinery and equipment and working capital . It provides up to an 80 percent loan guarantee with a commitment capped at $ 50,000 . There is no loan amount maximum and the terms and interest rate are to be determined by the lender with whom the business is working .
In order to maximize resources , the business must be located in Frederick County or agree to locate here prior to settlement . It must be a start-up or early stage for-profit company with 100 or fewer employees . Borrowers must provide at least 5 percent equity , and preference is given to Frederick County ’ s targeted industries or high-growth industries .
The program will be administered by the Frederick County Office of Economic Development and managed by a volunteer-driven Loan Guarantee Committee . Lenders will serve as the primary contact for prospective Frederick County Small Business Loan Guarantee clients .
The program requires that an applicant be approved for conventional bank financing contingent upon a loan guarantee before applying . For more information , including administrative guidelines and a Small Business Loan Guarantee Application , call the Frederick County Office of Economic Development at 301-600-1058 .
STATE PROGRAM OFFERS ‘ GAP FUNDING ’
As part of the Sustainable Communities Act , the State of Maryland developed a program in which public and private investments and partnerships help to develop healthy economies with growth practices that conserve resources and appreciate historical and cultural resources .
There are four designated Sustainable Communities in Frederick County – Brunswick , Emmitsburg , Middletown and Thurmont .
The State of Maryland ' s Neighborhood BusinessWork ' s loan program provides gap financing ( or subordinate financing ) to new or expanding small businesses and nonprofit organizations in these communities .
ELIGIBLE PROJECTS & USES OF FUNDS
• Mixed-use projects combining residential and commercial uses in the same building
• New construction or rehabilitation
• Machinery and equipment
• Certain other costs associated with opening or expanding a small business
• Real estate acquisition
• Manufacturing
• Service providers
• Retail
PROJECT CRITERIA
• Project must be located in a Sustainable Community
• Project viability and potential impact on the neighborhood
• First floor business or retail space use that generates street level activity in mixed use projects
• Improvements to a vacant or under-utilized building or site
• Readiness to proceed
• Cash flow and collateral
LOAN TERMS
• Loan amounts up to $ 500,000 or 50 % of the total project costs , whichever is less
• Interest rate is based on an underwriting analysis
• Target loan term is five to 15 years , depending on use and loan amount
• Minimum 5 % applicant cash contribution is required ( based on total new project cost )
• Personal guarantees and collateral are required
• No prepayment penalties
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To apply , visit http :// dhcd . maryland . gov / Business / Pages / NBW . aspx
SPRING 2016 | FREDERICK COUNTY GUIDE 25