Direct 166 Loan Program
- 1. 166 Direct Loan 166 Direct Loan Program The 166 Loan Program was created in 1982 to promote economic development in the State of Ohio. Created a large revolving loan fund out of which loans are made. As repayments are collected, new loans are made. The 166 Loan Program provides low-interest loans to businesses willing to commit to create new jobs or preserve existing employment opportunities in the State of Ohio.
- 2. 166 Direct Loan Available Funding Loan amounts of $500,000 to $1 million Typically between 30-50% of the projects allowable costs Up to $15,000 per job ($35,000 in priority investment areas) Partner with bank and equity Rate and Term Interest rates are fixed Term conditions upon the useful life of the assets Maximum of up to 15 years for real estate Maximum of up to 10 years for machinery and equipment
- 3. 166 Direct Loan Collateral /Security Requirements Shared first priority mortgage and/or lien position on assets financed loan proceeds Personal guarantees from owners with 20% ownership in company May be required: Corporate guarantees from related companies Full or partial letter of credit Life insurance on key business owners Equity Requirement - 10% of the loan amount No pre-payment penalty Take-out financing Funds will only be disbursed once the project has been completed. The borrower will be responsible for securing financing for project related cost through loan closing and project completion.
- 4. 166 Direct Loan Eligible Businesses and Costs include: Manufacturing, Research and Development, Distribution Retail projects are ineligible Fixed asset investments Land and building acquisition Building expansion, renovation and construction Equipment purchases Acquisition of ongoing business fixed assets Limited soft costs
- 5. For More Information: Web Site: For all ODOD debt financing information discussed today or more detailed information http://development.ohio.gov/EDD/Loans_Grants.htm Questions? Contact: Office of Financial Incentives State of Ohio, Department of Development (614) 466-5420
- 6. Ohio Department of Development Financing Programs Ohio Economic Development Association Office of Financial Incentives October 14, 2009
Editor's Notes
- #3: The program requires the creation or retention of one job for each $15,000 of loan proceeds within a 3 year period. There is a Priority Investment Area map for eligible areas. The office of Strategic Research updates the map on January 1 st and July 1 st of each year.e
- #4: When are personal guarantees required? For privately held companies, occasionally we will consider a Letter of credit in lieu of a personal guarantee. If the company has sales greater than $150 million and impressive financial performance.