Loan Programs Available
to Businesses in Grover Beach
There are currently two loan programs available to the owners of businesses in Grover Beach. A short description of each follows. You can read about the loan programs, and find out where to get more information about participating in the programs from this Web Page.
Revolving Loan Fund
Economic Vitality Corporation of San Luis Obispo County
To find out more about the Economic Vitality Corporation visit their Web Site or call
Web Page: www.sloevc.org
Voice (805) 782-9156 Fax (805) 781-6193
412 Higuera Street, Suite B
San Luis Obispo, CA 93403
Revolving Loan Fund
What is a revolving loan fund? The local jurisdictions are granted state or federal funds to create a Revolving Loan Fund ( RLF ). The funds are intended to create private sector jobs or to provide services or goods for low and moderate income persons and to diversify and strengthen the economic base.
RLF loans are used to fill gaps in financing to businesses that are unable to obtain suitable private sector lending. A letter of denial from a conventional lender is required.
Loans are tailored to the capital needs of the individual business. However, these funds are limited. Therefore loans are structured for a scheduled period of time with a much shorter "call period" than conventional loans. This allows time for the business to become profitable before repaying the loan so the funds can be re-loaned or in other words "revolve".
Eligible applicants include private, for profit firms, including corporations, partnerships, and sole proprietorships, as well as cooperatives organized for the conduct of business.
A borrower is eligible only when credit is not otherwise available on terms and conditions which would permit completion of the project to be financed.
The majority of the jobs created or retained by borrowers must be for individuals whose incomes meet the low to moderate income levels per federal/state guidelines.
Loan Terms and Fees
- Maximum loan amount of $150,000
- Terms are tailored to the capital needs of the business, maximum 15 years term
- Loan fees are 2% of the amount of the RLF portion
- Generally 10-20% equity is required. The borrower's equity injection may be composed of cash, equipment, land, buildings, or other assets to be utilized by the small business.
Public Benefit Requirement
- Create or retain one job for every $35,000 borrowed from the RLF .
- Provide goods or services to residents where at least one low to moderate income person is served per $350 of borrowed funds.
Use of Funds
The loan may be used for any of the following.
- Land costs, including engineering, legal, grading, site mapping, and related costs.
- Building costs, including real estate, engineering, architectural, legal, insurance and related costs.
- Acquisition of machinery and equipment, furniture, fixtures and leasehold improvements.
- Working or start up capital.
- Refinance debt that threatens the stability of the business.
How to Apply for a Loan
The following documentation is required before the Economic Vitality Corporation can begin analyzing projects for eligibility.
- A current profit and loss statement proforma. Provide a realistic projected cash flow and profit and loss statement for one year (monthly breakdown).
- A current personal financial statement of the proprietor, or each partner or stock holder owning 20% or more of the corporate stock.
- Itemized use of proceeds.
- List collateral with an estimate of current market value and liens against the collateral.
- A business plan and resumes of the principals.
- A schedule of business debt, listing accounts receivable and accounts payable.
- Personal and business tax returns for the past three years.
- A copy of lease, if property is leased.
- Any contracts or agreements pertinent to the application.
- Submit a RLF Loan Application Package.
For more information call us at (805) 782-9156. Or visit the Grover Beach Chamber of Commerce office at 177 South 8th Street across from City Hall where we have a complete loan package on file for you to view.
Send us e-mail at firstname.lastname@example.org
Or visit our Web Page www.sloevc.org
Storefront Improvement Project
Mid State Bank
To find out more about Mid State Bank visit their Web Site or call:
(805) 489-1336 Ask for Bill Racine
Web Page www.midstatebank.com
899 Grand Avenue
Grover Beach, CA 93433
Storefront Improvement Project
In March of 1997, the City of Grover Beach and Mid State Bank entered into an agreement to help local businesses improve their building facades using loans from Mid State Bank at very competitive interest rates. The agreement is titled the "Storefront Improvement Project" and is available to all business owners in Grover Beach. Following is a brief description of the program. For more information call Mid State Bank in Grover Beach and talk to branch manager Bill Racine.
Loan of funds - Mid State Bank agrees to loan funds to certain applicants participating in the program on the following conditions....
- Borrower shall have executed a Storefront Improvement Project Application for improvements to certain property of Applicant.
- The bank shall have forwarded the application to the City for its review and approval.
- The City shall have given Mid State Bank written approval of the Applicant participating in the program.
- The applicant and the real property owner, where applicable, shall have met the bank's creditworthiness standards for unsecured credit, which standards shall be such as are commercially reasonable in the banking industry.
- The bank shall lend no more than a total of $20,000 to the applicant.
Loan Amounts - Mid State Bank agrees that loan terms offered to Applicants shall be as follows...
- For loan amounts up to $5,000, the interest rate shall be 1% below the West Coast prime interest rate, with repayment term of 36 months, fully amortized. The bank shall charge a $100 Documentation Fee. The loan is unsecured.
- For loan amounts of $5,001 up to $10,000, the interest rate shall be 1% below the West Coast prime interest rate, with repayment term of 60 months, fully amortized. The bank shall charge a $100 Documentation Fee. The loan is unsecured.
- For loan amounts of $10,001 up to $20,000, the interest rate shall be 1% below the West Coast prime interest rate, with repayment term of 84 months, fully amortized. The bank shall charge a $100 Documentation Fee. The loan is unsecured.
Use of Funds
The bank shall take commercially reasonable steps as are necessary to ensure each applicant uses its loan funds for purposes of making storefront improvements (as described in the application). The City shall exercise it's powers to ensure that the storefront improvements are made in accordance with the application, together with any and all conditions of building permits or other documentary evidence of improvements. All storefront improvements are required to be completed within six months from the date the applicant receives the loan funds.