By Heather Alexander,2014-01-26 10:17
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The CPA has established an RLF to provide financial assistance to small and emerging

    business enterprises (see attachment A) located in Coshocton County. The assistance

    will be in the form of a low interest, fixed rate loan to businesses willing to commit to

    create new jobs or preserve existing employment opportunities in Coshocton County.

    Funding for the RLF Program has been provided by the USDA with matching local

    funds provided through the CPA. All loans must be in accordance with USDA regula-

    tions and CPA policies and guidelines.

    Eligible Businesses Eligible businesses include those engaged in manufacturing, assembly, distribution, re-

    search and development, commercial and retail, and service-related activities that meet

    the USDA definition of a small and emerging business enterprise and are majority

    owned by U.S. citizens.

Small and Emerging Business Requirements

    Small and emerging means any private business enterprise which will employ 50 or

    fewer new employees and has less than $1 million in projected gross revenues.

A private business must be owned and controlled either by individuals or by a legally

    organized non-public entity such as a corporation.

Gross revenues are defined as revenue of a business before deductions for any pur-

    pose, except for sales returns. In the case of a manufacturing or merchandising

    business, gross revenue means gross profit (gross sales receipts less cost of goods


U.S. Citizenship Requirement

    To be eligible for the RLF Program at least 51% of the outstanding interest in the project

    must be owned by those who are citizens of the United States or reside in the United

    States after being legally admitted for permanent residence.

    Eligible Project Costs ? Purchase of land and/or building

    ? Purchase of machinery and equipment

    ? Building construction and/or renovation costs. (Construction requires an environ-

    mental assessment that can be time consuming and is discouraged from using the

    RLF Program. Renovation of a building that is fifty years or older requires a lengthy

    sign off from the State Historic Preservation Office.)

    ? Purchase of an ongoing business’ fixed assets

    Ineligible Costs ? Refinancing of existing debt

    ? Financing of speculative projects or businesses

    ? Land banking

Factors that Make a Project Ineligible

    ? Unresolved environmental problems

    ? Less than 10% cash equity for the project

    ? Requiring more than 40% financing from the CPA RLF Program

    ? Do not have proper patent rights, licenses, permits, or certification

    ? Cannot demonstrate an ability to repay the loan

    ? Are not willing to offer equal opportunity in their employment practices

    ? Cannot meet job creation/retention requirements

    ? Not current with local, state and federal taxes

    ? Not current with other loans

    ? Involve illegal activities

Job Creation/Retention

    CPA may loan $15,000 for the creation of one full-time job, or $10,000 for the creation

    of one full-time or one part time/seasonal job being created or $5,000 for one full time

    job being retained from loan proceeds within a three-year period. If the applicant wish-

    es to use the RLF Program for job retention, they must clearly state why the jobs are at


Available Funding

    The RLF Program has a limited amount of funds available and has established the fol-

    lowing criteria to leverage the Program benefits:

    ? Bank lending participation is required. Only under special circumstances will CPA

    approve an RLF Loan that does not have bank lending participation.

    ? An RLF Loan shall not exceed 40% of total eligible project costs.


    The term of any loan awarded through the RLF Program should reflect the terms estab-

    lished by the participating bank. It is conditioned upon the useful life of the financed

    assets with the maximum limit of up to 10 years for real estate (with an amortization to

    match the bank loan term), and 10 years for machinery and equipment.

    Interest Rates Interest rates will be determined by the CPA, but will not exceed two-thirds (2/3) of the

    then current prime rate. In setting the interest rate the CPA will consider the loan term,

    percentage equity, quality of collateral, etc.

    Revised March 2007 - 2


    A minimum of ten percent (10%) owner’s cash equity is required and twenty percent

    (20%) is preferred. The CPA reserves the right to establish equity requirements for

    each project loan.


    CPA will require adequate collateral. If there is no bank lender participation, CPA will

    require a first priority mortgage and/or lien position, on the fixed assets being financed.

    With bank lender participation, CPA will accept a second mortgage and/or lien position.

All assets offered as collateral must have a third party appraisal and environmental

    clearance if applicable. CPA will generally accept the same documentation as provided

    to the participating bank.

Collateral and Security Requirements

    ? No transfer of ownership without CPA approval. If sold, the RLF Loan must be paid

    off as part of the sale; however, assumptions may be considered on a case-by-case

    basis (required)

    ? Personal guarantees from owners with more than twenty percent (20%) ownership in

    the business (required)

    ? Corporate guarantees from related companies (required)

    ? Full or partial letter of credit (optional)

    ? Life insurance on key business owners and/or managers (recommended)

    ? Other types of credit enhancement, if necessary

Other requirements

    ? All USDA requirements and CPA policies must be complied with, including but not

    limited to the following:

    ? Evidence of life, property and casualty insurance

    ? Evidence of worker’s compensation coverage

    ? Credit report from bank

    ? Agreement to report annually on employment and equal opportunity

    ? Proper execution of all required USDA and CPA documents

    Program Fees CPA shall have the right to charge and collect from the applicant/borrower the following:

    ? Application Fee: A $100 non-refundable application fee is payable with the submis-

    sion of the application to CPA

    ? Closing costs: After RLF Loan approval, Borrower shall pay estimated legal fees

    prior to the loan closing. All other closing costs shall be deducted from the loan

    proceeds. [CPA reserves the right to retain legal counsel to properly prepare closing


    Revised March 2007 - 3

    Participating Lender Rates and Terms Interest rates, terms and fees are negotiated between the business and the bank lender.

The Coshocton Port Authority reserves the right on a case by case basis with excep-

    tions to be recommended by the Executive Director to the RLF Committee and approval

    by the CPA Board of Directors.

In Accordance with Federal law and U.S. Department of Agriculture policy, this institution is prohibited from discriminating on the basis of race, color, national origin, sex, age, or disability. (Not all prohibited bases apply to all programs). To file a report of discrimination, write: USDA, Director Office of Civil Rights 1400 Independence Avenues, S.W. Washington, D.C. 20250-9410 Or Call: (800) 795-3272 (Voice) (202) 720-6382 (TDD)

    Revised March 2007 - 4

Attachment A




    (Attachment A of RLF Program Information)

A private business must be owned and controlled either by individuals or

    by a legally organized nonpublic entity such as a corporation.

Small and emerging means any private business enterprise which will em-

    ploy 50 or fewer new employees and has less than $1 million in projected

    gross revenues.

    Revised March 2007 - 5

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