City of Oroville - Small Business Loan Program

City of Oroville

S M A L L B U S I N E S S L O A N P R O G R A M

Quick Reference

Small Business Loan Program

General Information

Phone 530.538.2495
Fax 530.538.2539
E-mail businessassistance@cityoforoville.org

Introduction
      The City of Oroville's Enterprise and Revolving Loan Fund (RLF) Programs have been established to provide critical capital needs to businesses and real estate projects that will create and/or retain jobs and increase the community's tax base.

Purpose and Objective
      The Enterprise/RLF Programs are designed to provide no more than one-half of the project's total financing requirements. The Enterprise/RLF Program Funds will only provide Small Business Loan Program the funds necessary to bridge the "financial gap" that allows the project to move forward. The Enterprise/RLF Program Funds are targeted to businesses and projects that have the greatest potential for long-term job creation and/or retention, particularly jobs created and/or retained to benefit target income group households.

Funds can be used for:
      • Working Capital
      • Inventory Purchase
      • Equipment Acquisition
      • Real Property Acquisition, Construction, and Rehabilitation
      • Furniture and Fixtures

      The State Community Development Block Grant (CDBG) Program funds the Enterprise/RLF Program. Loans are not made from the General Fund.

Economic Benefits and Objectives
      The following elements are critical in the selection of loans for the Enterprise/RLF Program:

      • Existence of "financial gap"

      • At least 51% of the jobs created and/or retained must be from TIG
         households.

      • Loans must meet underwriting criteria.

      There is no minimum loan amount. However, loans will require additional
      approval by the State Department of Housing and Community
      Development(HCD) and loans exceeding $250,000 will need HCD loan
      committee approval.

Credit Requirements
      A loan applicant must 1) be of good character 2) Show ability to operate business successfully 3) Have enough borrowing ability or equity to operate on a sound financial basis 4) Show proposed loan is of sound value 5) Show past earning records and ability to repay loan.

Loan Terms and Conditions

Small Business Loan Program       • Term: Up to 25 years

      • Interest rate: Based on needs and demonstrated
        "financial gap" not to exceed 5%.

      • Pre-Payment Penalty - 5% of the outstanding loan
         balance if prepaid during the first 12 months.

      • Job Creation/Retention - Must create one full-time job
         (1,750 hours annually) per $35,000. or two
         permanent part-time jobs (875 hours annually), can be aggreagted.

      • Loan Fee - Two points (2%), with a minium of $ 250.00 loan packaging fee
         and any direct costs incurred in excess of one point (1%) including:
         loan processing and closing fees such as recording fees,
         attorney fees and escrow fees.

         Collateral Requirements: All Enterprise/RLF Loans shall be fully secured
         by collateral.

Leveraging
      One private dollar for equity and/or debt for every Enterprise/RLF dollar lent.

Eligible Applicants
      Eligible applicants include ongoing and start-up private, for profit business concerns, corporations, partnerships, sole proprietorships, and cooperatives, incorporated and licensed, and are located in or expanding to the City of Oroville.


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M O R E I N F O R M A T I O N

| First Time Home Buyer | RDA First Time Home Buyer |
| FTHB In-Fill Construction | Enterprise Zone | Housing Rehabilitation Loan |
| RDA Rehabilitation Program | RMDZ | Landscape Improvement Program |
| Small Business Loan Program | Business Technical Assistance | Credit Counseling |
| Business Resources | Emergency Home Repair Grant | Minor Home Repair Loan |
| Small Business Development Center | Micro-Enterprise Technical Assistance |

Oroville City Hall • 1735 Montgomery Street • Oroville, CA 95965

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