Business Loans

The Economic Development Division of the RPC is a central resource for a variety of innovative federal, state and local business loan programs:

• Community Development Assistance Program (CDAP) – Loans designed to stimulate growth, job creation, expansion and retention of businesses located within Champaign County but outside the cities of Champaign and Urbana
• Community Services Block Grant (CSBG) – Similar to CDAP used primarily within the Champaign-Urbana metropolitan region
• Community Development Corporation (CDC) – Small business start-up funding for low to moderate income residents of Champaign County

	Community Development Assistance Program - CDAP	Community Services Block Grant - CSBG	Champaign County Community Development Corporation - CDC
Uses	Working Capital Machinery & Equipment Land and Building	Working Capital Machinery & Equipment Land and Building	Working Capital Machinery & Equipment Land and Building
Rate	6% with a 1% fee	5% with a 1% fee	NY Prime + or - 2% with a 1% fee
Structure	20% of project cost up to maximum of 49%	20% of project cost up to maximum of 49%	20% of project cost up to maximum of 49% - Minimum 1:1 matching with conventional bank financing - Minimum 10% owner equity injection
Amount	Minimum - $15,000 Maximum - $500,000	Minimum - $15,000 Maximum - $150,000	Minimum - $15,000 Maximum - Depends on available balance
Term	5 - 10 years contingent on collateral and use of funds	5 - 10 years contingent on collateral and use of funds	Negotiable depending on collateral and use of funds
Job Creation	One fulltime equivalent job for every $15,000 of CDAP funds invested	One fulltime equivalent job for every $15,000 of CSBG funds invested	One fulltime equivalent job for every $15,000 of CDAP funds invested
Collateral	Senior position preferred on identifiable assets	Senior position preferred on identifiable assets	Senior position preferred on identifiable assets
Location	Within Champaign County with some restrictions	Within Champaign County	Within Champaign County - Preferably capital intensive or technology oriented

 

All programs are intended for small businesses that cannot fully access conventional lending sources.

All programs have the specific goal of Job Creation for individuals in families of low to moderate income status.

Background

The Champaign County Regional Planning Commission (RPC) is a central resource for a variety of innovative federal, state and local business loan programs. These programs are designed to stimulate the growth, expansion and retention of businesses within Champaign County. The RPC's economic development programs offer borrowers lower interest rates, long-term fixed rate financing, lower down payment requirements, and enhanced private lender risk. RPC staff are available to analyze and structure the most attractive financing proposal based upon business needs, employment opportunities created, and the level of private sector participation. The Commission is a well established participant in the commercial lending field having closed on over 150 loans with a total volume of over $12 million.

Eligibility

A business applicant must demonstrate job creation or retention as a result of the proposed economic development to be eligible for RPC loan programs. A high level of private sector financial participation is also required. Each of the loan programs is designed for sound business financing. Programs are available for start-up businesses, led by strong entrepreneurs, when matched with a reasonably secure collateral position, significant bank participation, or a high level of owner's equity. Expanding firms should have a solid track record of past accomplishments and commercial lender participation. Some well-capitalized firms may be able to match the RPC's low interest rate loan exclusively with owner's equity. These loan programs may not be used to refinance existing debt and are not available for marginal businesses with limited debt capacity except in very extreme circumstances.

Credit Criteria

Since these programs are for healthy and expanding businesses, the credit criteria require that the business demonstrate adequate cash flow from operations for debt service and sufficient collateral to secure the loan. The principals of the business normally will be required to personally guarantee the loan.

Application Procedure

Interested applicants should work jointly with a private sector lender and RPC staff. This effort will ensure that the business client receives the optimal financing package utilizing current economic development resources.

The written project request should include the following:

• Business plan including company history and structure
• Three years historical financial statements and tax returns
• Three years sales and cash flow projections
• Schedule of collateral
• Explanation of the financing need
• Terms and conditions of conventional bank loan and any other financing arrangements
• Sources and uses of funds statement
• Job creation commitment
• Any other pertinent information
• Each applicant will be charged a one percent origination fee

Approval Process

Approval of requests will be based on two broad criteria:

• The external need for the project including commercial feasibility, job creation potential, local economic impact, and
• The risk associated with the project including the current financial position, rate of return, available collateral, soundness of projections and community development impact