Loan Terms

Maximum Loan Amount
The maximum available loan amount is $100,000 or up to 100% of your business’ average monthly revenues for three months prior to the COVID pandemic outbreak (in 2019 or early 2020), whichever is less. The maximum loan amount available under this program is $100,000.

An example of how your maximum loan amount is calculated
To determine your business’s average monthly revenue for an estimate of potential loan size, the lender may use the following:

  • September 2019 Revenues: $10,000
  • October 2019 Revenues: $15,000
  • November 2019 Revenues: $20,000

Based on the above-referenced example, the average revenues for the period is $15,000 so 3-months of average revenues would be $45,000. In this example, the maximum loan size would be $45,000.

Please note that the actual size of the loan for which you may be approved will be determined by the lender after review of your business’s documentation and financial information. The amount of the loan for which you are ultimately approved may be less than the amount indicated by the example above. If the average monthly revenues for your business for the 3-month period is greater than $100,000, the maximum loan size will be $100,000.

Interest Rate
The current fixed annual interest rate for loans issued under the program will be 4.25%. The interest rate will be fixed for the life of the loan.

If there is a change in the Wall Street Journal Prime Rate, the interest rate on loans offered under this program after such change may increase or decrease, but any change would not affect loans already approved. Any updates to the rate will be communicated through this website.

Repayment
There are two different types of loans offered under this program: one with a 60-month repayment schedule, and the other with a 36-month repayment schedule. Your eligibility for the type of loan for which you qualify will depend on your financial qualifications, which will be determined by the lender.

60-Month Term Loans

The repayment details of loans offered with a 60-month repayment schedule include:

  • For months 1 – 12: Interest-only payments; you will be making monthly payments only on the interest charged on the loan
  • For months 13 – 60: Principal and interest payments; your monthly payments will include interest and principal based on a 48-month fully amortizing schedule

For example*:

Loan amount $100,000 $50,000 $20,000  
1-12 months $354.17 $177.08 $70.83 interest only
13-60 months $2,269.11 $1,134.55 $453.82 interest + principal

* Example assumes a fixed interest rate of 4.25%. Simple interest will be charged on the loan. For months 1-12, monthly interest-only payments are required. For months 13-60; principal and interest monthly payments are required based on a straight-line amortization over 48 months and assuming full repayment at 60 months. Final payment may differ. Payments are estimates for illustrative purposes only.

36-Month Term Loans

The repayment details of loans offered with a 36-month repayment schedule include:

  • For months 1 – 12: Interest-only payments; you will be making monthly payments only on the interest charged on the loan.
  • For months 13 – 36: Principal and interest payments; your monthly payments will include interest and principal based on a 24-month fully amortizing schedule
Loan amount $100,000 $50,000 $20,000  
1-12 months $354.17 $177.08 $70.83 interest only
13-36 months $4,353.63 $2,176.81 $870.73 interest + principal

* Example assumes a fixed interest rate of 4.25%. Simple interest will be charged on the loan. For months 1-12, monthly interest-only payments are required. For months 13-36, principal and interest monthly payments are required based on a straight-line amortization over 24 months and assuming full repayment at 36 months. Final payment may differ. Payments are estimates for illustrative purposes only.

Term
5 years (60 months) or 3 years (36 months)

Proceeds
Proceeds can be used for working capital, inventory, marketing, refitting for new social distancing guidelines, operating and emergency maintenance, property taxes, utilities, rent, supplies, and other appropriate business purposes. Proceeds may not be used for refinancing a loan from another community lender but may be used refinance high cost debt.

The loan applicant will be required to detail the proposed use of loan proceeds when they apply.

Borrower Fees
Loans may include minimal third-party fees up to a maximum of $250 such as UCC filing fees or wiring fees, for example.

Please note that a late fee may be assessed by the lender if the borrower does not make a loan payment on time. You will be shown any fees associated with the loan prior to your acceptance of any loan terms.

Security and Guarantees
No specific collateral is required to be eligible (e.g., you do not need to have access to any specific real estate or equipment). Please note that this program requires a blanket first or second lien on business assets to be filed by the community lender and any owners with more than 20% ownership must sign a personal guarantee.

Prepayment
A borrower may prepay the loan, in whole or in part, at any time without penalty.