Financing can be complicated – below are the questions we answer most frequently.
GFDA Finance Programs are for start-up and existing businesses that are:
- Unable to access traditional commercial finance resources – your application to a bank is denied or the bank refers you to us
- Seeking incentive for an expansion of their current facility or markets
- Seeking incentive for creation or retention of high paying jobs
- Seeking an incentive for making investments in targeted geographic areas or cleaning up polluted sites
What loan amounts are available from GFDA Finance Programs?
GFDA manages finance programs and funds that originate at the Environmental Protection Agency, Economic Development Administration, Small Business Administration, and the Department of Agriculture. The loan amounts available from each program are based on the regulations governing these programs. However, the first steps in the GFDA investment process are to work with you to determine:
- How much investment you need from us? You can visit our Small Business Development Center to review or create your start up or expansion plans
- Your eligibility for an investment from us
- What the application process for an investment program you qualify for entails, and whether you would like to proceed
How long does it take to approve an application?
Your business is important to us. Once all the application materials and processing fee are collected, we will prepare a review of your application. The more complete your application is the faster we can process it. Generally staff analyze your application and make a “go” or “no go” decision. If we decide it is a “go” then we will take it our loan review committee for their approval. In some instances, a final approval is required from the public agency who is funding the program – for example the SBA and the EPA. If your application is approved, you will get a commitment letter from us or sponsoring public agency with the terms of the investment. Your signature of the commitment letter is the binding agreement to make the investment. Funds can be disbursed as soon as the terms of the commitment letter are completed. This may take from 60 days to two years depending on the nature of your project.
What is the loan review committee?
The loan review committee consists of nine community members who have volunteered to provide a second level of loan application analysis. As a group, their experience covers small and large business ownership and management, legal and financial services, real estate sales and valuation. The loan review committee does not receive any benefit form approving or denying an application.
How much does the loan cost?
GFDA charges a non-refundable $75 application fee that will be deducted from the processing fee if the loan is approved. The processing fee may be up to 2% of the loan amount. GFDA does not compete with banks, so we will generally charge higher interest rates than they do. However, the rates for the SBA 504 program are set monthly on the open market and are generally lower than bank rates. Also, if you are applying for incentive finance, then the interest rate will be tied to your proposed job creation or retention or targeted investment project. As a rule of thumb, to get incentive rates for your loan:
- The jobs you create or retain should pay more then the average wage (excluding benefits) for the county in which your project is located
- The targeted investment should be in one of the identified re-investment areas. GFDA staff will assist you with locating one of these areas.
- You should expect to incur other costs and expenses in association with preparing and collecting documents for processing and closing your loan.