Kent Mini Loan

KENT MINI LOAN INFORMATION AND FACTS

The purpose of the Kent Mini Loan Fund is to make adequate and affordable credit more readily available to existing and start-up business in Kent. Loans are made in the amount of $10,000 to $50,000.

Personal guarantees of the borrowers will be required in addition to a first security interest in assets to be acquired with the proceeds of the loan.

The Kent Mini Loan Fund may share loans with any regulated financial institution. However, participation with another lender is not required as part of the program.

All Kent Mini Loan loan applications are reviewd by a Loan Review Committee of local lenders and community representatives. The Loan Review Committee issues the decision to approve or deny any requests, as well as the terms of the loan.

The personal credit history of the borrower and business credit history will weigh heavily in the decision-making process. Reports indicating bankruptcy will not themselves disqualify a borrower. Rather, bankruptcies will be investigated further to determine the circumstances reported to the Loan Review Committee. Bankruptcies must have been discharged for at least one year and the applicant must demonstrate that they have re-established good credit.

All borrowers must commit to on-going business and consulting throughout the life of the loan. Consulting services are provided on a free and confidential basis by the Kent Regional Business Alliance SBDC

Eligible Borrowers

  • Any for-profit entity, such as a sole-proprietorship, partnership, corporation, or limited liability company located or planning to locate in the official limits of the City of Kent
  • General service, retail businesses, contractor businesses, and small manufacturing firms.

Ineligible Borrowers

 

  • Firms which do not have their primary place of business in the City of Kent, Ohio.
  • Developers, community based organizations, and non-profit organizations.
  • Borrowers with poor credit histories, lawsuits or judgements. Exceptions will require documentation evidencing satisfaction of liabilities.

 

Eligible Uses

  • Acquisition of land and building or rehabilitation of owner-occupied premises.
  • Acquisition of machinery and equipment.
  • Working capital needed to purchase inventory and/or carry eligible receivables.
  • Franchise fees.
  • Leasehold improvements with a lease term of not less than five years.

Ineligible Uses

 

  • Debt refinancing will be permitted in exceptional cases only.
  • Payment of delinquent taxes.
  • Research and development costs.
  • Organizational costs.
  • Acquisition, rehabilitation or construction of residential real estate.

 

Interest Rate

The Kent Mini Loan Fund lends its funds at a fixed rate. The rate for each loan shall be determined by the Loan Review Committee based on the risk associated with each individual loan.

General Repayment

The loans will be self-amortizing loans requiring monthly principal and interest payments, to range between two and ten years.

Alternative payment schedules may be acceptable if there is a guarantee of payment such as in contract financing receivables, financing where proceeds of the contract are assigned as collateral of the loan.

Fees

 

  • A $25.00 non-refundable fee is due from the borrower with the loan application.
  • Each borrower will pay an additional $5.00 per month per loan as a servicing fee.
  • A loan-closing fee equal to 3% of the original amount of the loan shall be paid by the borrower at the loan closing.

 

Closing Costs

All costs related to the application and the loan, including but not limited to fees for appraisals, surveys, inspections, tests, record searches, title insurance premiums, UCC filings, and document preparation and recording, shall be paid by the borrower.

Financial Information

Quarterly financial statements within 60 days will be collected from each borrower. Annual financial statements within 90 days of the business year-end (can be tax returns) are required.