Economic development financing programs, like the SBA 504 loan program and Ohio Regional 166 program available through HCDC, tend to run counter-cyclical in economic downturns. While nationally the overall SBA 504 lending activity is down, HCDC’s 504 loan activity is still running even with or even slightly ahead of last year’s, and there is plenty of money available in the SBA 504 loan program and the Ohio Regional 166 loan program. With its recent expansion into Kentucky statewide, HCDC can now offer the SBA 504 loan program throughout the Commonwealth of Kentucky, as well as the State of Ohio. The 504 program has seen its rates increase slightly to 6.7 percent currently. However, it is fixed for terms of either 10 or 20 years, and depending upon the project, HCDC can finance in participation with a bank or other private lender up to 90 percent of the eligible project costs.
These loan programs are limited to financing fixed assets, such as real estate or machinery and equipment. Of course, the Ohio Regional loan program is limited to the State of Ohio, but at a current interest rate of approximately 3 percent, it is an attractive financing option for businesses in need of acquiring machinery and equipment or purchasing other fixed assets. HCDC currently has over $3 million in Ohio Regional 166 funds available.
HCDC’s third loan program, the Community Reinvestment Fund USA (CRF USA), essentially has two programs. The New Markets program is limited to low-income census tracts, and carries an interest rate of below 6 percent. The other program, the business loan, has no such census tract restrictions but carries a higher interest rate of approximately 8 percent. Both are limited to financing real estate.
Overall, even in these challenging economic times, HCDC’s economic development lending programs have money to lend to businesses that need to acquire fixed assets to expand their operations, create jobs, and provide economic benefit to our communities.
