Your
Resource for Business Solutions
|
SEDA-Council of
Governments
Your
Resource for Business Solutions |
|
FAQ |
|
| Here are some answers to Frequently Asked Questions about the Finance Program at SEDA-COG: | |
|
|
| Q: | Can SEDA-COG provide 100% financing for my project? |
| A: | No. The loans from SEDA-COG act as supplemental or "gap" financing in a project. Depending on the funding source, as little as 33% or as much as 50% of a project can be funded through SEDA-COG. Multiple loan programs may be accessed for a single project, thus increasing the amount of participation, but at least 10% of the cost must come from the business. |
| top | |
| Q: | How much of my own money do I need to bring into the project? |
| A: | For existing businesses, the typical equity (cash) requirement is 10% of the project cost. If a building is involved in the project and it is designated as a "special purpose" building, an additional 5% equity is required. For start-ups, the typical equity (cash) requirement is 15% of the project cost. If a building is involved in the project and it is designated as a "special purpose" building, an additional 5% equity is required. |
| top | |
| Q: | What are the interest rates for the SEDA-COG loans? |
| A: | Interest rates vary based on the loan program being used. Rates can go as low as 2% for specific eligible projects. Typically, rates range from 4% fixed to 7% fixed. |
| top | |
| Q: | How long are the terms of the loan? |
| A: | For equipment, 5 to 10 years (typically 7); or land and building, 10 to 20 years, depending on the loan program. In the limited cases of a working capital loan, the term is 3 years. |
| top | |
| Q: | Are SEDA-COG's loans available to service and retail establishments? |
| A: | The majority of our loan programs are for manufacturers. However, the SBA 504 loan program and IRP loan program can be accessed by service and retail establishments. If a company is involved in the agriculture, hospitality, daycare, or tourism industry, they may qualify for the Small Business First loan program. |
| top | |
| Q: | What is the typical loan amount through SEDA-COG? |
| A: | Our loans range in size from about $40,000 to as high as $1,300,000. Our average loan is around $250,000. Smaller loans, from $2,500 to $35,000 can be accessed through the SBA Micro Loan Program. |
| top | |
| Q: | I have a start-up business idea. Can SEDA-COG help me get financing? |
| A: | Yes. While most of the companies we work with are established businesses, we can help finance start-up enterprises. Start-ups will require a minimum equity (cash) injection into the project of 15%. A completed business plan is also required. Check with your local SBDC for help in developing a business plan. |
| top | |
| Q: | Can I refinance my existing debt through SEDA-COG? |
| A: | The USDA B&I Guaranty can be used to refinance existing debt. However, certain restrictions apply. |
|
© 2008 SEDA-Council of Governments |
|
SEDA-COG
is an equal opportunity lender/provider |
|
SEDA-Council of Governments Phone: (570) 524-4491 |
|
|
