Areas Served: Kansas City
The Neighborhood Commercial Revolving Loan Fund (NCRLF), a City-initiated and funded program, is designed to assist small businesses in Kansas City, Missouri, with building acquisition and improvement and acquisition of machinery and equipment in neighborhoods in need of revitalization.
The City of Kansas City, Missouri, provides CDBG funding for this program through a contract with EDC.
The NCRLF typically assists businesses with financing needs of less than $150,000 for building and/or improvements.
A bank provides a loan for 50% of the costs at market interest rate for a term of up to 15 years.
The NCRLF provides a loan for 40%, up to $150,000, for a maximum term of 15 years and a fixed interest rate of 5%.
As with the RLF, there must be a demonstrated need for this financing.
In other words, credit is not available through conventional lenders.
Geographic Area: Project to be located within the Federal Enhanced Enterprise Zone, State of Missouri Enterprise Zone, Urban Core Program area and certain commercial redevelopment areas.
Contact EDC to determine if a property is within these areas.
Eligible Costs: – Purchase and/or 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 and/or owners or leaseholders of commercial properties.
– Projects not eligible for financing, if credit is otherwise available on terms and conditions that would allow the project to proceed.
– No refinance.
– Not for recreational facilities that serve a predominantly higher-income clientele, professional sports teams, or acquisition of land for unspecified use.
Amount: Maximum of $150,000 per borrower, including affiliates, generally not to exceed 40% of total project costs.
Borrower generally contributes 10% of the costs as equity.
Private lender provides financing for 50% of the project at a rate not to exceed Prime 2%.
Term, Rate and Fees: – Maximum term is 15 years on real estate; seven years on equipment.
– Interest rate is set at 5% fixed.
– 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.
Other: – Neighborhood Commercial Revolving Loan Fund loan generally a subordinate lien position on project assets, providing the bank a stronger loan value.
– Personal guarantees generally required for individuals owning 20% or more of the borrowing entity.
– Borrower must demonstrate profitability, a positive tangible net worth, and repayment ability.
– Collateral assignment of life insurance is normally required on principals of the small business in the amount of the NCRLF loan.
– For all contracts for improvements >$2,000, borrower must pay Davis-Bacon, or prevailing wage rates.
Please check with your contractor to see how this impacts the cost for improvements.
Contact InformationEconomic Development Corporation of Kansas City Missouri
Address: 1100 Walnut, Suite 1700
City: Kansas City
State: Missouri
Website:
http://edckc.com
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