Eligibility
• Eligible borrowers are legally recognized forms of business, including sole proprietorships, partnerships, corporations, limited liability companies, limited liability partnerships, professional service corporations, not-for-profit corporations, and cooperatives.
• Most projects require the creation or retention of employment opportunities. Countywide Revolving Loan Fund and Town of Dryden Loan Fund applicants must create employment opportunities for low and moderate-income persons.
• The applicant business must be located in Tompkins County (The applicant business must be located in the Town of Dryden, Village of Dryden, or Village of Freeville to be eligible for the Town of Dryden Loan Fund).
• The applicant business must be a Minority Business Enterprise or a Women Business Enterprise to be eligible for the Minority and Women Loan Fund.
• The business activity to be undertaken with assistance from the Program must be consistent with the principles and policies of the Tompkins County Comprehensive Plan to be eligible for the Countywide Revolving Loan Fund.
Application Review and Approval Process
• TCAD staff meets with interested applicants and describes the goals of the program and the approval process. Businesses or entrepreneurs are encouraged to submit an application if funds are available and if the proposed business and project meet the guidelines of the program. Applicants are informed that eligible projects are reviewed on a first-come, first-serve basis. Businesses deemed ineligible are referred to other economic development programs when possible.
• If an applicant needs assistance completing the application form, they are referred to other organizations that can assist. TCAD staff does not provide comprehensive business planning assistance. TCAD does recommend that applicants seek the advice of a local attorney and accountant.
• TCAD staff reviews applications for completeness and, if necessary, requests additional information from the applicant. If the application is complete, it is sent to the TCAD Revolving Loan Fund (RLF) Committee. They usually have at least one week to review the application. The Committee is also given an opportunity to request additional information from the applicant.
• A meeting is scheduled in order for the applicant to meet with the TCAD RLF Committee. During this meeting, the Committee discusses the application and has the opportunity to ask questions of the applicant. This session with the applicant is very helpful in resolving any questions the Committee may have about the business.
• The Committee, after the applicant is excused from the meeting, will usually make a decision regarding the request. The decision will include all of the terms and conditions of the loan and outlines any additional information that may be required before the loan is closed. No action by the TCAD Board or Executive Committee is required.
Use of Funds
Program funds may be used for real estate acquisition, construction, renovation, fixed assets, and permanent working capital. Refinancing of existing debt will only be considered if it is a required element of the overall project financing.
Amount of Financing
Program loans may be no greater than the minimum amount necessary to effect the business activity. Loan amounts are generally established based on the need for assiaatnce and the amount of Program funds available. However the following minimum and maximum amount shall apply:
Minority and Women Loan Fund - maximum loan amount is $50,000.å
Countywide Revolving Loan Fund - minimum loan amount is $50,000.
Town of Dryden Loan Fund - minimum loan amount is $50,000.
Loan Structure
The typical structure of a loan would have a conventional lender providing a majority of the financing, the applicant contributing a minimum of 10% equity, and TCAD providing the remaining funds necessary. The TCAD Loan Program does not replace conventional financing. Its goal is to participate in situations where the necessary conventional financing and equity is not available or where the cost of the available funds is such that debt service cannot be covered by available cash flow. TCAD funds can be used in conjunction with other government programs.
Rates and Terms
The Program generally offers fixed rates that are determined based on such factors as the risk of default, the value of collateral and other security, the cash flow requirements of the company, and the prevailing commercial lending rates. Most Program loans will offer a rate below that of the existing prime commercial lending rate.
The length of the loan is generally aligned with the useful life of what is being financed. Typically, working capitals loans are for two to three years, while loans on machinery and equipment are for three to seven years. Because the program desires to re-use funds as often as possible, real estate-related loans will usually have a shorter term than conventional financing. In the past, TCAD has developed amortization schedules based on a 20-year term, but this schedule required a 10-year balloon payment.
Collateral & Other Security
• TCAD will generally require a security interest in all assets financed with Program funds. Other assets of the borrower may be required as additional security at TCAD's option.
• TCAD will require the personal guarantee of all persons having at least a 20% ownership interest in the borrowing entity.
• TCAD may, at its discretion, require additional security including, but not limited to additional collateral, guarantees, and the assignment of life insurance.
• TCAD will generally allow our Program collateral interests to be subordinate to other private institutional lenders where necessary to facilitate the maximum financial participation by the private lenders.
• TCAD will generally require a subordination to Program financing of the notes payable to any officer, owner, or similarly affiliated party to the borrower.
Reporting Requirements
• Consistent with standard commercial lending policies, the borrower will be required to submit periodic financial information during the term of the loan.
• The borrower will be required to submit annual employment numbers until employment creation requirements have been met, generally for up to three years.
• Countywide Revolving Loan Fund and Town of Dryden Loan Fund borrowers will be required to report information regarding job applicants and persons hired.
Fees
An application fee of $250 is due at closing. The applicant is also responsible for paying the TCAD attorney's fees, which generally range from $300 - $800.
Download the Revolving Loan Fund application