Lending Power | Loan Programs & Leadership for small business

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SBA 504 Current Rate:

4.625%

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The Basics

EDA Loans are often combined with loans from other lenders to create a total financing package. CIC works closely with lenders to put together a package that works the best for the borrower.


ADVANTAGES

90% FINANCING

  • The total financing package can be as high as 90% of the cost of the project, allowing a small business to conserve cash for working capital or other expansion needs
  • The interest rate on an EDA Loan is a low fixed rate, eliminating the risk of rate fluctuation.Both the fixed rate and the term of the EDA are market driven.

ELIGIBILITY

The quickest and easiest way to see if a business and a project are eligible for an EDA Loan is to contact CIC.  The financial staff will determine whether an EDA Loan or a different program is the best financing solution for a business.

 

EDA - DEFENSE LOANS

  • The business must be in the Defense Loan Territory.
  • The borrower must demonstrate that the loan will:
  • Assist the business to become less dependent on defense contracts and related work.
  • Or show that it will help the business create jobs as part of a business expansion.

 

Defense loans can be used for:

  • Real estate; both land and buildings
  • Renovation and/or expansion of your current business space
  • Purchase and installation of machinery & equipment
  • Working capital

 

EDA - NAUGATUCK VALLEY

  • The business must be in a qualifying city or town in Hartford, Litchfield, New Haven or Fairfield County.
  • The borrower must demonstrate that the loan will:
  • Assist the business to become less dependent on defense contracts and related work.
  • Or show that it will help the business create jobs as part of a business expansion.

 

This specific loan can be used for:

  • Real estate; both land and buildings
  • Renovation and/or expansion of your current business space
  • Purchase and installation of machinery & equipment
  • Working capital

Requirements

COLLATERAL & INSURANCE

  • CIC will seek to obtain a minimum 1:1 collateral coverage on a discounted basis.
  • Real estate is typically valued at 15% of appraised value; machinery and equipment at 50"/o of cost (new) or appraised value (used); and inventory at 10% of cost.
  • A loan will not be denied solely based on lack of available collateral. Evidence of hazard insurance coverage naming CIC as mortgagee/loss payee (as applicable) will be required together with evidence of liability and workers compensation insurance coverage and any other coverage deemed necessary by CIC.

 

LIEN POSITION

  • Whenever possible CIC will obtain a first lien position on the asset(s) being financed with EDA funding.
  • For inventory/ and working capital loans, CIC will obtain a blanket lien on all business assets.
  • To induce private sector investment, CIC will agree to accept lien positions subordinate to the third party private lenders participating in the project.
  • In the event non-project assets are available, CIC will obtain a lien subject to existing liens in favor of third party lenders.
  • Related party loans must be subordinated to the EDA Loan in terms of payment, collateral and remedies.

 

GUARANTY

  • All owners of 20% or more of the operating business (or real estate holding company affiliated with the operating business) must provide joint and several unconditional guaranties of the EDA loan.

CIC is an economic development lender contributing financial expertise and practical guidance to small business entrepreneurs in Connecticut and Rhode Island who have powerful ideas and need more power to grow them.