CEZCs Business Loan Program provides subordinate financing for larger projects and expansions, which can include financing for commercial real estate acquisition and renovations. To date, this option has provided more than 35 business loans totaling approximately $4 million.
Use of Funds: Funds may be used for the acquisition of land and buildings, new construction and site improvements, renovations, acquisition of machinery and equipment, and working capital. Working capital may be used for inventory financing, receivable financing, training and marketing financing.
Loan Amounts: Loan amounts may be up to 40% of the total project costs within target markets with a maximum loan amount of $250,000. The percent of Cumberland Empowerment Zone Corporation (CEZC) funding is determined by the ability to utilize other public/private funding sources and the project’s gap in financing. In addition to projects costs and funding sources, loan amounts are also based on the number of jobs created and the impact the project has on the community. The federal guideline of $25,000 per job created is utilized as a basis for this evaluation.
Borrower’s Equity: Loan applicants are required to provide at least a 10% equity contribution to the project.
Rates and Terms: Interest rates and terms are based on the structure of the financing and the Empowerment Zone resident benefit. The interest rate is fixed and is set by the CEZC Board of Directors. The term is a five-year balloon with amortizations up to 25 years subject to the useful life of the asset, or fully amortized loans up to a maximum of 15 years.