| Here are some answers to Frequently Asked Questions about the Finance Program at SEDA-COG: |
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| Q: |
Can SEDA-COG provide 100% financing for my project? |
| A: |
No. The loans from SEDA-COG act as supplemental or "gap" financing in a project. Depending on the funding source, as little as 33% or as much as 50% of a project can be funded through SEDA-COG. Multiple loan programs may be accessed for a single project, thus increasing the amount of participation, but at least 10% of the cost must come from the business. |
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| Q: |
How much of my own money do I need to bring into the project? |
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For existing businesses, the typical equity (cash) requirement is 10% of the project cost. If a building is involved in the project and it is designated as a "special purpose" building, an additional 5% equity is required. For start-ups, the typical equity (cash) requirement is 15% of the project cost. If a building is involved in the project and it is designated as a "special purpose" building, an additional 5% equity is required. |
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| Q: |
What are the interest rates for the SEDA-COG loans? |
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Interest rates vary based on the loan program being used. Rates can go as low as 2% for specific eligible projects. Typically, rates range from 4% fixed to 7% fixed. |
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| Q: |
How long are the terms of the loan? |
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For equipment, 5 to 10 years (typically 7); or land and building, 10 to 20 years, depending on the loan program. In the limited cases of a working capital loan, the term is 3 years. |
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| Q: |
Are SEDA-COG's loans available to service and retail establishments? |
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The majority of our loan programs are for manufacturers. However, the SBA 504 loan program and IRP loan program can be accessed by service and retail establishments. If a company is involved in the agriculture, hospitality, daycare, or tourism industry, they may qualify for the Small Business First loan program. |
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| Q: |
What is the typical loan amount through SEDA-COG? |
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Our loans can range in size from about $40,000 to as high as $4,000,000. Our average loan is around $250,000. |
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| Q: |
I have a start-up business idea. Can SEDA-COG help me get financing? |
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Yes. While most of the companies we work with are established businesses, we can help finance start-up enterprises. Start-ups will require a minimum equity (cash) injection into the project of 15%. A completed business plan is also required. Check with your local SBDC for help in developing a business plan. |
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| Q: |
Can I refinance my existing debt through SEDA-COG? |
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The USDA B&I Guaranty can be used to refinance existing debt. However, certain restrictions apply. The SBA 504 loan program can also provided limited refinancing opportunities. |