The City of Hamilton’s Revolving Loan Fund (RLF) provides low
interest loans for expansion projects by private, for-profit
businesses occurring in Hamilton. Loans are made primarily for the
purchase of machinery and equipment, although purchase, renovation
and/or construction of buildings are also eligible.
Business Benefits
The RLF offers two primary benefits to existing Hamilton businesses
and/or those companies choosing to relocate to Hamilton. The RLF
allows for a lower down payment (usually around 10%) of the project
cost in equity than traditional commercial financing, permitting
companies to conserve their cash to ensure steady and profitable
growth. In addition, the RLF offers a below market interest rate on
all loans. The exact rate for each loan will be determined on a
project specific basis.
Typical Project Structure
A typical RLF project will be structured with 10% equity, 40% RLF, and
50% from a private lender. The maximum loan amount for any project
through the RLF is $100,000. The Department of Economic Development
will work closely with the business’ private lender throughout the
project.
Hiring Requirements
A minimum of one job must be created or retained within three years
for each $15,000 of RLF funds invested in the project. At least 51% of
these jobs must be made available to or held by low/moderate income
persons.
Collateral Position
Typically, the private lender will have the primary collateral
position on the asset that is financed. The City will typically take a
secondary collateral position and personal guarantee. The City may
also require additional collateral to secure its loan.
Application Process
Once a project is determined to meet the necessary financial and
program requirements, it proceeds through a two-step approval process.
First, the Hamilton Community Improvement Corporation reviews the
application and provides a recommendation to the City Council. Second,
the City Council must formally approve the loan. The total approval
process is estimated to take between sixty and ninety days. Once this
occurs, the project may begin. The loan is closed and funds are
disbursed when the project is completed.
Reporting Requirements
Annually, each recipient of a loan through the RLF will be required to
submit employment documentation to verify compliance with the job
creation requirements. The business must also submit periodic
financial statements during the loan terms. Additional documentation
may also be required, on a project specific basis.
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