MSBDFA FUNDING GUIDELINES FOR ALL PROGRAMS:
SSBCI, Contract Financing, Guaranty Fund, Surety Fund, Equity Participation Investment Program
|Fund Use||Provide working capital, acquisition of equipment, supplies, business-occupied real estate (if business occupies at least 51% of useable square footage), business acquisitions, leasehold improvements, professional/technical assistance, refinancing of existing debt (under qualifying circumstances).|
|Loan Products||Term loans, open and revolving lines of credit, demand loans, letters of credit and guaranties to financial institutions.|
|Investment Products||Convertible Subordinated Note, Preferred Stock, Common Stock, Warrants, and other equity vehicles.|
|Surety Bonding Products||Bid, payment and performance bonds.|
|Range of Funding||Loans: Minimum of $25,000 up to a maximum of $2,000,000.
Equity: Minimum of $25,000 up to a maximum of $1,000,000.
Professional/Technical Assistance up to $25,000.
Surety Bonding up to $2,500,000.
Loan Guarantees up to 80% with a maximum exposure of $2,000,000.
|Term of Debt||One month up to 7 years (with amortization of up to 20 years)|
|Interest Rate on Debt||Rates for term loans will be fixed and range between 2% and 7%*.
Rates for lines of credit will be fixed and generally be between 4% and 8%* with exception of the Contract Financing line of credit, which is prime + 2%.
Rates for professional/technical assistance loans will be 2%.
*To access the lower rates, must be eligible for SSBCI funding.
|Surety Bonding Fees||Premiums fees up to 2%|
|Loan Guaranty Fees||Annual fees range from .5% to 1.5%|
|Collateral||Full, limited, and no collateral value coverage will be considered.|
|Personal Guaranties of Debt, Surety Bonding and Loan Guarantees||Will be required.|
|Years in Business||Generally, businesses that have been operating for at least two (2) years. Start-ups (0 to 2 years) will be considered if principals have significant industry experience or support.|
|Personal Credit Scores||For Loans/Surety Bonding: Minimum personal credit score of 550 for at least 50% of the ownership of the business.
For Equity: Minimum personal credit score of 600 for at least 51% of the ownership of the business.
|Application Fee & Closing Costs||Application Fee: $250 except for loan guaranties and surety bonding.
Closing Costs: When financing is approved, a Commitment Fee of $500 will be required at acceptance. The Commitment Fee will be applied to the closing costs. The closing costs will consist of credit, lien, judgement reports, lien filing fees, and incidental costs.
Financing document preparation and MSBDFA’s legal counsel will be the responsibility of MSBDFA. If the financing does not close, these costs become the responsibility of the applicant.