EDFC MICROENTREPRENEUR LOAN PROGRAM

The Economic Development and Financing Corporation has been selected to administer the USDA Rural Development Rural Microentrepreneur Assistance Program throughout Lake and Mendocino Counties.  This program provides access to capital in order to boost small business development, create jobs and strengthen rural communities.

EDFC is partnering with West Company and Community Development Services to offer technical assistance to clients who participate in the RMAP Loan Program. Technical assistance is designed to help the microentrepreneurs to obtain additional tools needed to operate their businesses successfully.

ELIGIBILITY
• For profit, privately owned, established small businesses located in Lake and Mendocino Counties.
• Must have 10 or fewer full-time equivalent employees.
• Start up or growing businesses which may not meet regular bank lending criteria, but which have a track record in business and/or paying their bills on time and which have reasonable prospects of being able to repay a loan.
• Have sufficient monthly income to pay back the loan.
• If business owner is behind in payments, child support payments, or in default on any loans including government and student loans this could make the owner ineligible.

LOAN AMOUNT
• Maximum of $50,000
• A 25% non-federal funding match is required

INTEREST RATE & FEES
1. Fixed rate of interest starting as low as 6.5% (based on risk rating)
2. Application Fee of $100
3. $200 origination fee for all loans up to $10,000 and 2.5% origination fee for loans from $10,001 to $50,000
4. Closing costs such as Title Insurance when applicable
5. May require enrollment fee for California Capital Access Program (loan loss reserve)

REPAYMENT TERMS
• 10 year maximum term
• No prepayment penalty

COLLATERAL
• First lien on collateral is preferred
• Subordinate lien on real estate is possible
• Personal guarantees of the owner(s) (20% or greater) of the business are required

USE OF FUNDS
• Working capital
• Inventory
• Equipment financing
• Any legitimate business need except construction.

TECHNICAL ASSISTANCE AND TRAINING
Required and available at no or minimal charge through the term of the loan
Includes accounting, marketing, basic business management, and employee concerns