Areas Served: City of Peoria
The CSBG program provides long-term, fixed-rate financing to new or expanding Peoria, Illinois companies in exchange for job creation and employment of low-income individuals.
It links federal, state and private financing by using CSBG funds at a low interest ate in combination with bank funds and equity.
Loan proceeds may be used for the purpose of purchasing equipment, inventory and supplies as well as a limited amount of working capital.
By combining bank financing with low interest CSBG Loans, the program is able to offer below market interest rates for up to ten year terms.
Generally, 20 percent to 49 percent of each loan consists of CSBG dollars from local Community Action Agencies.
The publicly funded portion of the loan is made available at an interest rate not to exceed five percent; at least one job must be created for and filed by a low-income person for each $20,000 of public investment.
The remaining portion of each loan is obtained from a local bank, owner’s equity or other sources.
The Small Business Administration may guarantee up to 90 percent of the bank’s portion of the loan through its 7(a) program.
The final overall “blended” interest rate of the borrower is well below the usual market rates available to the small business for fixed rate loans.
The interest rate for the CSBG Loan portion shall have a fixed rate ranging from 5% to 7.5%.
Job creation requirements for the CSBG Loan program are as follows: Businesses accepting CSBG Loan funds must hire at least one new, full time equivalency (minimum 37.5 hours per work week, averaged annually) CSBG Eligible employee for each $20,000 or any portion thereof of CSBG monies borrowed.
Example: $1-$20,000 = 1 job $20,001-$40,000 = 2 jobs $40,001-$60,000 = 3 jobs If part-time employment is involved in the created jobs, the full time equivalency shall be no more than two employees making up one 37.5 hour work week.
A hiring schedule must be part of each loan agreement.
The required hiring must be completed within the first 24 months of the loan, with at least 50% of the new employees hired in the first 12 month period.
For purposes of this hiring time frame, the loan is considered consummated on the date the borrower first receives the loan funds.
The term of the CSBG Loan may not exceed 10 years.
The CSBG financing must be committed simultaneously or prior to the closing of other financing.
Contact InformationPeoria Citizens Committee for Economic Opportunity
Address: 711 W. McBean St.
City: Peoria
State: Illinois
Website:
http://www.pcceo.org/business.html
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