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Loans

Are you looking for a loan for your business?

Note: Agriculture-related loans are described on the Food Systems page.

The Five Cs of Lending are the factors that lenders consider when making loan decisions:

  • Character: Your reputation in the community; your treatment of customers, suppliers and employees; your integrity; your financial history, which could be reflected in your credit score.
  • Capacity: Your ability to repay the debt with regular (usually monthly) payments. This is often demonstrated by historic cash flow and profitability.
  • Capital: The amount of investment the owners of the business are making. The amount of capital invested by owners reduces the risk of the lender and demonstrates the commitment of the owners--the owners are exposing themselves to risk.
  • Collateral: Collateral is used to reduce the risk of lending. Collateral consists of assets (real estate, equipment, inventory, etc.) that are legally assigned to the lender. They can be used as a secondary source of repayment if the borrower fails to pay back a loan.
  • Conditions: The operating environment (competition, market opportunities) and economic environment are important to lenders as they assess the potential of a business to be successful. The actual loan amount, interest rate and repayment terms are the second type of conditions that affect lending decisions.

Interested in applying for a loan from NEOEDD? Our loan officer, Mike Ogan, can help you get started. Give him a call at 541-519-7699 or email him at mikeogan@neoedd.org.

You can also call the Enterprise office at 541-426-3598 or 800-645-9454. We have several loan programs to serve you. A basic description of the types of loans, what they can be used for, and interest rate information are shown below.

REVOLVING LOAN FUND

The Revolving Loan Fund (RLF) provides long-term, fixed-rate financing for land, buildings, equipment and machinery, and permanent working capital.

Program Guidelines

  • Maximum loan is 50% of eligible project costs--preferred level of participation is 33%; this means that you will need financing from other sources – yourself, a bank, another loan program, etc.;
  • Individual loans may not exceed $250,000 for both programs;
  • Refinance of existing debt is discouraged;
  • A minimum of one job must be created for every $25,000 of RLF investment;
  • The RLF may not supplant private bank financing;
  • Not recommended for construction projects, as Davis-Bacon wage rates are required;
  • Interest rate depends on risk and other factors.

Information Required for RLF Loans

  • A brief description of the business and its operations and services. Highlight your market, your customers and major competitors.
  • A description of the project to be developed including the assets to be purchased and their costs.
  • The number of full- and part-time jobs that will be created as a result of this project.
  • Description of any affiliated corporation, partnerships or businesses in which a principal with 10% or more interest in the parent company also has a 10% or more interest in the affiliated company.
  • Three years of financial statements for the current business or corporation you are operating. This would include both a balance sheet and a profit-and-loss statement for each of these years. (This requirement does not apply to business start-ups.)
  • Cash-flow projections for the business. Explain how this project impacts the projections in terms of new sales and profits.
  • Personal financial statements and federal tax returns for those principals who own 10% or more of the company.
  • Interim financial statements for the most current period. These statements should be no older than 30 days.
  • Loans must be fully secured.
  • Loans will normally be subordinated to other project financing.
  • An equity injection of at least 10% will be required.

Application

After consultation with the loan officer, you may fill out an application (link below). There is an application fee of $100. The borrower is responsible for the costs of closing the loan, including appraisals, title insurance and a closing fee.

INTERMEDIARY RELENDING PROGRAM

The Intermediary Relending Program (IRP) provides long-term, fixed-rate financing for land, buildings, equipment and machinery, and permanent working capital.

Program Guidelines

  • Maximum loan is seventy-five percent (75%) of eligible project costs—this means that you will need financing from other sources – yourself, a bank, another loan program, etc.;
  • Individual loans may not exceed $250,000;
  • Refinance of existing debt is discouraged;
  • A minimum of one job must be created for every $25,000 of IRP investment;
  • The IRP may not supplant private bank financing;
  • The IRP can be used for permanent construction financing.

Information Required for IRP Loans

Same as for RLF loans, see above.

Link to RLF/IRP Application Form: PDF or Word document

 

OTHER LOAN ASSISTANCE

NEOEDD provides referral services for a number of other loan programs and can make recommendations on financing structures or strategies. We can help you determine the best source of funding for your project. A state loan program can offer low interest rates in return for significant job creation in distressed areas. Other state loan programs can be accessed though banking partners. The SBA 504 program can provide stable, low-interest loans for projects that include construction and equipment-acquisition. For more information on the state financing programs and tax credits, go to http://www.oregon4biz.com/Business-financing-resources/ or http://www.oregon4biz.com/The-Oregon-Advantage/Incentives/

 

SBA 504 Program

Uses

To finance land, buildings, equipment, new construction

Eligibility

For-profit small businesses

Amounts

$25,000 to $1,000,000 and no more than 40% of project

New Jobs Required

One per $35,000 borrowed

Rates

Below market rates, fixed

Term

10 or 20 years

Contact

GEODC

 

SBA 7(a) Loan Guarantee Program

Uses

To finance land, buildings, equipment, machinery, permanent working capital

Eligibility

For-profit small businesses

Amounts

$15,000 to $5,000,000; guarantee of bank loan

New Jobs Required

No job creation requirement

Rates

Maximum of 2.75% above prime

Term

Up to 25 years

Contact

NEOEDD (for packaging services) or your bank

 

Oregon Business Development Fund

Uses

To finance land, buildings, equipment, machinery, permanent working capital

Eligibility

Small businesses, except retail & offices

Amounts

Up to $250,000 and no more than 40% of project

New Jobs Required

One for each $15,000 borrowed

Rates

1% below U.S. Treasury Securities, fixed. Targeted Account: 4% below prime

Term

Up to 25 years. Targeted Account: 5 Years

Contact

NEOEDD for packaging services

 

Oregon Entrepreneurial Development Loan Fund

Uses

To finance new businesses

Eligibility

Must meet two of the following: business operating less than 16 months; business revenues of $50,000 or less; owned by a severely disabled person

Amounts

Initial loans up to $15,000 with $25,000 maximum

New Jobs Required

No job creation requirement

Rates

2% above prime, fixed

Term

Up to 5 years

Contact

Business Oregon or your local SBDC office

 

Oregon Credit Enhancement Fund

Uses

To finance land, buildings, equipment, machinery, permanent working capital

Eligibility

Small for-profit businesses including some service businesses, but excluding retail businesses

Amounts

Various levels of coverage up to $500,000

New Jobs Required

No job-creation requirement

Rates

Negotiated between borrower and lender

Term

Determined by lender

Contact

Your bank and Business Oregon

 

Oregon Capital Access Program

Uses

To finance most business activities

Eligibility

Any business

Amounts

No limit

New Jobs Required

No job-creation requirement

Rates

Negotiated between borrower and lender

Term

Up to 15 years

Contact

Your bank and Business Oregon

 

Oregon Industrial Development Revenue Bond Program

Uses

To finance land, buildings, acquisition, new construction, equipment, to expand or improve manufacturing industries

Eligibility

Manufacturing, processing and tourism related businesses

Amounts

Up to $10 million

New Jobs Required

Substantial new employment

Rates

75-80% of market rate (fixed or variable)

Term

Up to 30 years

Contact

Business Oregon

NEOEDD's loan officer, Mike Ogan, can be reached at 541-519-7699. Our main office numbers are 541-426-3598 or 1-800-645-9454. Business Oregon can be reached at 503-986-0123, 866-467-3466 or online at Business Oregon. GEODC can be reached at 541-276-6745.

 

NEOEDD/NOBD is an Equal Opportunity Lender, Provider, and Employer.
Complaints of discrimination should be sent to:
USDA, Director, Office of Civil Rights, Washington, DC 20250-9410