166 Direct Loan

• 166 Direct Loan Program– The 166 Loan Program was created in 1982 to promote economic development in the State

of Ohio.

– Created a large revolving loan fund out of which loans are made. As repayments are collected, new loans are made.

– The 166 Loan Program provides low-interest loans to businesses willing to commit to create new jobs or preserve existing employment opportunities in the State of Ohio.

166 Direct Loan

• Available Funding– Loan amounts of $500,000 to $1 million

– Typically between 30-50% of the projects allowable costs

– Up to $15,000 per job ($35,000 in priority investment areas)

– Partner with bank and equity

• Rate and Term– Interest rates are fixed

– Term conditions upon the useful life of the assets

• Maximum of up to 15 years for real estate

• Maximum of up to 10 years for machinery and equipment

166 Direct Loan

• Collateral /Security Requirements– Shared first priority mortgage and/or lien position on assets financed loan proceeds

– Personal guarantees from owners with 20% ownership in company

• May be required:

– Corporate guarantees from related companies

– Full or partial letter of credit

– Life insurance on key business owners

– Equity Requirement - 10% of the loan amount

– No pre-payment penalty

– Take-out financing

• Funds will only be disbursed once the project has been completed. The borrower will be responsible for securing financing for project related cost through loan closing and project completion.

166 Direct Loan

• Eligible Businesses and Costs include:– Manufacturing, Research and Development, Distribution

– Retail projects are ineligible

– Fixed asset investments

• Land and building acquisition

• Building expansion, renovation and construction

• Equipment purchases

• Acquisition of ongoing business fixed assets

• Limited soft costs

For More Information:

Web Site: For all ODOD debt financing information discussed today or more detailed

information http://development.ohio.gov/EDD/Loans_Grants.htm

Questions? Contact:

Office of Financial IncentivesState of Ohio, Department of Development(614) 466-5420

Ohio Department of Development Financing Programs

Ohio Economic Development Association

Office of Financial Incentives

October 14, 2009