Total Pool - $660,000.00
Allows the BDC to participate with financial institutions on a loan project by providing “gap” financing. “Gap” financing allows a project to qualify for traditional bank financing at a lesser dollar amount, with the BDC financing the “gap”. The maximum loan amount by the BDC is $125,000.00. The loan recipient actually has two separate loans, one with the financial institution and one with the BDC, which must be presented to and approved by the Revolving Loan Fund Committee. Loan terms are based on the life of the assets acquired as a result of the loan, and the rate is a fixed rate of Prime -1%, with a floor of 5%. There is a non-refundable application fee of $250.00. There is a one percent (1.00%) origination fee if the loan is approved. The Revolving Loan Program requires that for each $40,000 the BDC lends, one job must be created over a three-year period.
RLF LOAN PROGRAM
ELIGIBILITY REQUIREMENTS & PARAMETERS
Eligible Businesses
- Independently owned
- 500 or fewer employees
- Net worth of 6 million or less
- Net profit of 2 million or less
- Located within Region 2000 area
- Minimum cash flow coverage of 1.25
Project Eligibility
- Acquisition of land & building
- Construct/improve facility
- Purchase machinery, equipment & inventory
- Working capital
Loan Parameters
- Loans from $5,000 to $125,000
- Creation/retention of 1-job per $45,000 loaned
- Non-refundable application fee of $250
- A 1% origination fee
- Fixed rate based on the current prime rate at closing, minus 1%, with a minimum rate of 5%
Project Investment Parameters
- Minimum cash investment from company of 10%
- Investment by the Business Development Centre of 40%, not to exceed $125,000
- Minimum investment by Bank of 50%