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 Frequently Asked Questions

Here are some answers to Frequently Asked Questions about the Finance Program at SEDA-COG:
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 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.
Q: How much of my own money do I need to bring into the project?
A: 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.
Q: What are the interest rates for the SEDA-COG loans?
A: 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 6% fixed.
Q: How long are the terms of the loan?
A: 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.
Q: Are SEDA-COG's loans available to service and retail establishments?
A: 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.
Q: What is the typical loan amount through SEDA-COG?
A: Our loans can range in size from about $25,000 to as high as $5,500,000.  Our average loan is around $250,000.
Q: I have a start-up business idea.  Can SEDA-COG help me get financing?
A: 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.
Q: Can I refinance my existing debt through SEDA-COG?
A: 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.