Microenterprise Loan Program
Economic Development Department provides financial assistance to
start-up and expanding businesses through the Local Development
Corporation of the Town of Union.The
Town of Union Microenterprise Loan Program is one of several loan
programs offered by the Local Development Corporation of the Town of
Union.Assistance is also
available to coordinate government and private sector resources and
package business proposals.By
networking with local brokers, economic development staff can also
assist business contacts in identifying Town of Union sites.
Microenterprise Program is an initiative in order to make funding
available to start-up or existing businesses with five (5) or
fewer employees (one of which must be the owner of the existing or
proposed business) that may not be able to be approved for a loan
through what might be considered a traditional means of financing (i.e.
Commercial Bank, Credit Union, etc..) without the use of public funds.
Application Fee: $50.00 (non-refundable)
Application Period: Open
Interest Rate (as of 11/15/2012): 1.5%
The one and one half (1.5%) percent interest rate is fixed
for three (3) years.
Amount of Financing:
Up to 75% of eligible projects, not to exceed $20,000.Minimum loan is $2,500.
One percent (1%) of the approved loan amount
Any legal borrowing entity.No borrower that has defaulted on a previous Local
Development Corporation loan or any other direct or indirect federally
funded or guaranteed loan program will be eligible to apply.
Town of Union, including the Villages of Endicott and
Eligible Use of Proceeds:
Acquisition of land and buildings; *New
Construction; *Expansion; *Renovations; *Leasehold improvements;
Acquisition of existing businesses; Furniture and Fixtures; Machinery
and Equipment; Trucks; Automobiles; Inventory; Working capital, Fees for
professional services, such as appraisals, surveying, accounting,
engineering and architectural.
* subject to Federal Labor Standards Provisions (see
Ineligible Use of
Accounts Receivable; Wages; Speculative product
development; Refinancing; Incorporation fees; Loan packaging fees;
Application fees, Late fees and fines.
Lending institutions; Recreation facilities not open to the
public; Investment real estate; Gambling facilities; Bars; Tavern; New,
used and rental cars sales/leasing businesses; Laundromats, Beauty and
barber shops and similar personal services; Nursing homes; Family day
care homes, or Day care centers, if not licensed by the state;
Businesses operated from the home.
Amount of Participation:
At least 25% of the project cost is funded privately,
either through a private lender, another public lender and owner equity (a
minimum of 10% owners cash equity is required).
Term of the loan:
Based on the life of the asset and the approved amount of
the loan not to exceed a term of three (3) years.If leasing, the term of the loan can not exceed the length of
First mortgage or subordinate mortgage to a bank on all
property and buildings taken as collateral; Tangible personal property;
Furniture and Fixtures; Machinery and Equipment; Marketable securities.An appraisal may be required on any tangible personal property
and/or buildings taken as collateral. Appraisal values must be greater
than the loan financing, and can not exceed the allowable program
Personal guarantees from company owners and spouses if
involved in the operation of the business.Corporate guarantees.
Federal Labor Standards Provision:
This loan program is subject to the Federal Labor Standards
Provisions and the Davis-Bacon prevailing wage requirements (as
determined by the U.S. Department of Labor) where construction and/or
- Demonstrated need for financing
- Demonstrated ability to repay debt
- Demonstrated Commitment by the Owner (s)
- Firm project and project cost
Job Creation and Retention:
Funding is based on the number of jobs to be created within
two (2) years of the loan approval (not including the owner(s)).The majority (51%) of the jobs to be created or retained must be
filled by people from low and moderate-income households, or available
to people from low and moderate-income households.
United States Department Of Housing And Urban Development
Guidelines, Effective 11-30-12
Job Cost Ratio:
1 full-time job equivalent: $20,000
Start-up businesses may apply for funding under the Town of
Union Microenterprise Loan Program.Start-up businesses will have additional requirements for loan approval
- The Entrepreneur must incur risk i.e., the
entrepreneur must be investing a minimum of 10% personal capital into
equity is 10%.
- The Entrepreneur must demonstrate adequate management capability including the ability to manage both human and
The Entrepreneur must demonstrate intimate knowledge of
the industry in which he/she will operate a business.Such knowledge must include knowledge of billing practices,
competition, legal issues, marketing and advertising, etc.Start-up businesses may obtain assistance with their business
plan and other issues through the Small Business Development Center (SBDC)
or similar private and public agencies.