Ohio 166 Loan

The Economic Development Program for the State of Ohio
The "166" Loan Program is designed to assist growing manufacturing businesses acquire machinery, equipment and real estate by reducing overall debt service requirements through blending the "166" loan with conventional bank financing.

HCDC Provides Business Loans in Participation with Area Banks
Horizon Certified Development Company (HCDC) is a non-profit development company created to promote economic development. HCDC is a lender, chosen by the State of Ohio, to provide "166" loans to businesses expanding or locating in the State of Ohio.

An Unmatchable Interest Rate

• Interest rates for the 40% HCDC portion of the loan are set at not greater than 2/3 of the Prime Rate.
• The rate for the "166" portion will be fixed for the term of the loan.

How the "166" Loan Program Works
HCDC has been selected by the Ohio Department of Development to offer "166" loans in Southwestern Ohio. The borrower must contribute at least 10% of the project cost in cash. HCDC can provide 40% of the project cost up to a $350,000 loan. A private lender provides the balance on a shared first lien basis.

Example - $500,000 Project

• Manufacturers
• Distributors
• Other industrial

What Is Eligible for the "166" Loan Program?

• Financing for land acquisition and building construction (prevailing wage applies)
• Financing for building acquisition
• Financing for renovation or expansion (prevailing wage applies)
• Financing for machinery and equipment (prevailing wage applies for installation)
• "Soft" costs for appraisals, general surveying, architectural work and installation

Conditions for the "166" Loan Program:

• Refinancing of an existing obligation is ineligible.
• Inventory and working capital financing is ineligible.
• Companies receiving assistance under the "166" Loan Program are required to complete their project using the Ohio prevailing wage rate for construction, renovation, and machinery & equipment installation. The prevailing wage rate is determined by the Ohio Bureau of Employment Services.
• Business owners may own the building and lease to the company.
• For new construction, the operating company must occupy at least 75% of the building; For purchase of an existing building, the operating company must occupy at least 51% of the building.
• At least one job must be created or retained for each $35,000 in "166" funds loaned.
• All owners of the company stock will be required to personally guarantee the loan as well as any affiliate companies.
• A "166" loan may be prepaid. No partial prepayment, however, is permitted. There is no prepayment penalty assessed on "166" loans.

To Proceed, We Need to Review the Same Information as the Lender

• Purchase agreement for real estate.
• Written cost estimates on new construction, renovation, machinery or equipment.
• 3 years historical as well as interim corporate financial statements (balance sheets and income statements).
• 3 years projected financial statements (balance sheets and income statements).
• Personal financial statement of all officers and stockholders.
• Description of project and proposed financing structure.
• Product description and product literature, including the company's competition, method of distribution, the product's strengths and weaknesses, marketing strategies, future plans and company management.
• Resume from owners, officers and key managers of the company.

Even the "166" Process Is Simple

• HCDC will handle all the application paperwork, processing and review required by the State of Ohio.
• A $400.00 non-refundable application fee is required at the time of submission to HCDC and a 1.5% processing fee will be assessed at closing.
• A deposit of approximately $500 - $2,000 (depending on type and amount of loan) for out-of-pocket costs is required at the time of HCDC loan approval.
• Total normal processing time is about 45 days, depending on timing and calendar.

Benefits of the Ohio 166 Program - Click Here