Small businesses play a significant role in the local and national economy; they create jobs, help diversity the economy and lead to neighborhood revitalization. This loan program, therefore is designed to support non-standard lending features and help small business owners access capital.
Mission: To make loans of up to $75,000 at accommodating rate and terms available to qualified small and start-up businesses in Mecklenburg County.
Program Objectives
The loan program has non-standard lending features such as:
- Accommodate disadvantaged and veteran-owned businesses
- Take into consideration sophistication level and experience of business-owners
- Alternative or sub-prime credit
- Lower debt-service-coverage-ratio
- Lower equity contribution
- Longer amortization schedule
- Provide technical assistance to business owners to mitigate risk
- Interest only payments period, followed by principal & interest payments
Loan Eligibility and Program Guidelines
- Business must be located in Mecklenburg County
- Annual revenue under $1 million
- No bankruptcy filing for business ans/or owner within the past 5 years
- No open tax liens
- No unpaid judgments
- Owner/guarantor credit score 625 or better
- Minimum Debt-Service-Coverage Ratio: 1.15 or better
- Equity contribution: 20% for Start-up and New Business (1-3 years); 10% for Growing (4-7 years)
and Matured (over 7 years)
Potential Loan Terms
- Loan Amount: Up to $75,000
- Interest Rate: Prime + 2%; fixed at closing
- Term: Up to 10 years, depending on use and type of collateral securing the loan
- Amortization: For work capital, bridge loan and equipment purchase, the amortization period shall mirror the loan term. For real estate related, the amortization period may be extended to 15 years, with a 10-year term
- Origination Fee: 2% of the loan amount or $500, whichever is lower
- Documentation Fee: $250
- Guarantee: Any person or entity with 10% or more ownership in the business
Permitted Uses of Funds
- Business acquisition
- Equipment purchases
- Inventory purchase
- Working capital
- Commercial vehicle for business use
- Commercial real estate for owner-use
- Bridge loan on federal or state account receivables
How to Apply
The loan fund is administered by a leveraging partner, Carolina Small Business Development Fund. Click on the
link to connect with a loan officer at Carolina Small Business Development Fund.
Health Alert: To prevent spread of COVID-19, County services are operating at a limited capacity.