Loan: East Central Michigan (ECM) Revolving Loan Fund (RLF)

The ECM RLF provides gap financing/credit at reasonable rates to small and medium size businesses in Bay and Saginaw Counties. Target loans average $25,000 to $100,000 although the maximum loan is dependent on the fund balance. Loan terms will be negotiable with a maximum of five years for working capital, seven years for fixed assets and 15 years for land and buildings unless otherwise approved by the RLF Loan Fund Board.

Service Fees

An application fee of up to $500 will be charged. Legal fees for document preparation incurred by the ECM RLF will be the responsibility of the borrower at closing.

Objectives

Loans are for business development, including start-up and expansion of locally owned businesses. Funding is intended for job creation and/or job retention, redevelopment of blighted and vacant facilities, modernization of facilities/equipment, support for development and/or use of new technologies, support for economically disadvantaged groups, and diversification of area economic activity. Eligible borrowers include private, public and tax exempt entities in the industrial/manufacturing, commercial and service sectors.

Loan Criteria

Loans will be targeted for industrial or commercial activities where opportunities for private sector jobs are the greatest. Priority will be given to projects with a high ratio of other funds to RLF funds. Private investment (including loans) must be made concurrently with a RLF loan as part of the same business development project. Private investments do not include equity build-up or prior capital investment unless the investment is made within nine (9) months of the RLF loan. A private lender should also be making a loan to the company at the same time funds are being requested from East Central. Applicants must demonstrate a reasonable capacity to repay the loan. Adequate collateral will be required. A basic understanding of business bookkeeping and profitability measures will be expected.

Procedure

An application package is available from the East Michigan Council of Governments (EMCOG) at the address listed below. When complete, the application package is submitted to a Loan Committee of experienced lenders. A decision is generally made at the Loan Committee Board meeting if the application is complete. Funding is immediate at closing.

Contact

To apply for funding and to learn more information about the program contact Pam Lake at 989-928-0628 or, in Pam’s absence, contact Steve Jonas at 989-757-2107.