Areas Served: City limits of Kansas City
The EDC Revolving Loan Fund (RLF) is a good alternative for small businesses planning to spend less than $500,000 for fixed assets.
Typical financing structure is 10% equity, 50% from a commercial bank, and 40%, up to $200,000, outstanding per borrower, from the RLF.
The maximum term for the RLF is seven years for equipment and 15 years for real estate.
The interest rate can be fixed or variable, and can range up to prime plus 2%, with a floor of 4%.
The bank loan is at market interest rate and must have a minimum term of five years, though the amortization period can be extended.
The RLF takes a second collateral position and the bank has a first collateral position.
The RLF assists small businesses with expansions which create or retain jobs in Kansas City, Missouri, when conventional bank financing is not possible.
Because the bank has a first security interest and normally only 50% of the total financing, using the RLF can allow a small business to proceed with an expansion that would not occur otherwise.
The Economic Development Administration provided grant funds for this program.
Geographic Area: Business must be located within the city limits of Kansas City, Missouri.
Eligible Costs: – Purchase / Improvements to land and building.
– Leasehold Improvements.
– Machinery & Equipment, Furnishings & Fixtures.
– Soft costs of the project: interim interest, professional fees, etc.
Eligible Borrowers: – Private, for profit businesses, except retailers.
– Projects not eligible for financing if credit is otherwise available on terms and conditions that would allow the project to proceed.
– Not for debt refinance.
Amount: – Maximum of $200,000 per borrower, including affiliates, not to exceed 40% of total project costs.
Borrower generally shall contribute 10% of the costs as equity.
Private lender generally provides financing for at least 50% of the project on a term equivalent to the Revolving Loan Fund loan.
– Maximum of $100,000 per borrower on a working capital project, with private lender providing 50%.
Term, Rate and Fees: – Maximum term is normally 15 years on real estate; seven years on equipment.
– Interest rate ranges from a minimum rate of 4% to up to Prime 2%, fixed or variable.
– Origination fee of 1.5%; annual servicing fee of 0.5% of the original loan amount.
– Fees include the legal fees, filing fees, and other fees directly related to loan closing.
Contact InformationEconomic Development Corporation of Kansas City Missouri
Address: 1100 Walnut, Suite 1700
City: Kansas City
State: Missouri
Website:
https://www.edckc.com/entrepreneurship/grants-programs/
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