RCEDC Lowers Business Loan Interest Rates

Land, labor and capital—the essentials of doing business. Unfortunately, the financial crisis and economic recession have limited the capital available to companies throughout the country. In order to help spur local economic activity the Racine County Economic Development Corporation, through our sister company Business Lending Partners (BLP), has lowered its interest rates on some of its most popular business loan programs.

BLP has been working with our local financial institutions since 1985 to offer companion loans for business expansion projects. Here's an example of how it works. Let's say that a local manufacturing firm needs to expand at a total cost of $1.0 million. The project includes an expansion of the current facility, as well as the purchase of new equipment. As a result of the project, the company will be able to retain five workers and hire two new employees.

A local bank will provide 50 percent of the financing; BLP will provide 40 percent with the rest, or 10 percent, coming from the company's equity. In addition to the lower equity requirement, BLP's financing is provided at lower interest rates, a longer amortization and often a longer term. The net effect is retaining much needed cash for working capital purposes as the company grows.

There are some requirements. BLP requires the participation of a financial institution, there are collateral requirements and, in most cases, there are either job retention or job creation standards. In any case, in today's tough economy it's worth a call to BLP to investigate these great business expansion tools.

To help our local companies, BLP has gone one step further by lowering our interest rates on a variety of our most popular loan products. Interest rates now vary between 2 percent and 5.9 percent depending on the project, the number of jobs created or retained and the geographic location of the business. While the majority of our programs fund fixed asset projects, we do have access to some limited funds for working capital loans. The total project cost should generally be a minimum of $200,000 and the company should have a good credit history.

And you won't be the first business that's taken advantage of these great programs. Since 1985, the RCEDC has worked with 300 businesses resulting in nearly $250 million in total project costs and nearly $60 million in total RCEDC financing. As a result, the companies we have worked with have created or retained over 3,600 jobs.

Recently, our programs have been so popular that we've won a national award. Earlier this year, the RCEDC was recognized as the number one development corporation in the country for the number of Small Business Administration (SBA) 504 loan approvals in 2008 for portfolios of under $10.0 million. That's a 215 percent increase in loan volume! While we're proud of our accomplishments, we would be even happier if our next loan was able to help a local company expand and either retain or create new jobs for our community.

For more information on RCEDC programs and a determination as to whether you qualify, contact BLP Business Finance Manager Carolyn Engel at 262-898-7420.