What are the pros and cons of the Regional 166, and why should business owners prefer it over other options? Growth Capital Corp. offers information and support for those who require consultation before beginning the program.
While this loan doesn't pertain to retail projects, it does include a relatively wide range of project areas, making it a possibility for local construction projects, equipment financing and other necessary tasks.
The following summary will give businesses a chance to learn more about this loan offering and decide whether or not it's right for them.
Businesses need to be aware of their own eligibility and whether or not their intended use fits within the parameters of the loan. The Ohio Development Services Agency (ODSA) states that "industry, commerce, distribution or research activities" are possible project areas where the Regional 166 can apply. For-profit businesses that operate in these areas, as well as manufacturing, could also meet the guidelines.
If entities want to purchase existing land or buildings, more than 50 percent of premises have to be devoted to the business itself. With new construction, this must account for more than 60 percent of the building's premises.
Another criterion to keep in mind is the job creation that will result from the loan money. According to the ODSA, funded projects have to generate jobs, with at least one per every $50,000 borrowed, and the project costs require a 10 percent minimum equity contribution.
Though there's no prepayment penalty, this loan does come with processing, application and annual service fees. Finally, there are collateral concerns, including personal and corporate guarantees, life insurance and a letter of credit.
Length of Loan
Depending on the type of project the loan is needed for, Regional 166 loans can have terms as long as 15 years. This lengthy period can be a comparative advantage when considered alongside other possible loan options. This and the other long-term effects may influence business owners to consider the ongoing costs and expectations.
One of the notable advantages of this program, the Regional 166 interest rate is offered at a fixed rate under the market standard. Its low payments is another benefit. The size of the initial loan can range as high as $500,000, with rates and fees negotiable between the loan recipient and the bank officer. A bank involved will supply the borrower with an interim loan. In some areas, the interest rate could be as low as 3 percent, with most fixed at two thirds of the current prime rate.
Learn more about this and other Ohio small business loans by reading the Growth Capital Corp. website, or sign up for the mailing list for future updates. Click here to contact us and get more information about our headquarters.