Financing/Capital Formation Benefits
GCEDC offers 3 direct financing vehicles for commercial, industrial and service oriented enterprises. They include:
- The GCEDC Revolving Loan Fund (RLF)
- Bonds: Taxable and/or Tax-Exempt
- Grants: Small Cities (CDBG)
Revolving Loan Fund (RLF)
Since 1985, the GCEDC has operated the Genesee County Revolving Loan Fund (RLF). The RLF is available to Genesee County business owners as an affordable, low cost means to fill a financing gap in local development projects. Loans are available for projects that contribute to the economic development or stabilization of the Genesee County economy through capital investment of land and buildings, for acquisition of machinery and equipment and limited working capital for use by manufacturing, distributing and limited service industries. Loans may not be used for refinancing or repayment of existing debt, speculative projects or projects where appropriate financing is available from other sources.
Benefits of RLF
- Below market interest rates
- Collateral subordination
- Financing for equipment, real estate, construction/renovation and working capital
- Gap financing to support primary bank lending
Additional loan fund sources are available through GCEDC partners which include
- The City of Batavia RLF
- the Genesee Finger Lakes Regional Planning Council (GFLRPC) RLF
- Rochester Finger Lakes Regional Development Corporation (RFRDC) RLF.
Application Process
Based on past experience and a proven system, the GCEDC is able to generate a quick turn-around time from initial request to actual lending of money. A meeting of the loan committee will be scheduled within two weeks from the date the customer completes the basic loan application, which includes historical and projected financial information, and presents it to the GCEDC. A company representative is requested to attend this meeting to discuss the projects at which time a decision to fund the request will be made. The loan closing generally takes place at the same time as, or shortly after, primary bank closing.
- Complete the RLF loan application
- GCEDC loan committee reviews request and approves loans, applicant is requested to attend this meeting
- GCEDC prepares a commitment letter
- Customer signs commitment letter agreeing to the loan terms
- Loan Closing - concurrently or subsequent to the primary bank loan closing
Financing/Capital Formation Requirements -- Revolving Loan Fund
Requirements:
- Must be a Genesee County business and project
- RLF made in support of primary bank financing
- 10% owner equity
- Capital investment oriented
- Job creation or retention
Terms:
- Fixed rate term loan financing at 80% of New York Prime (at time of approval)
- Financing term up to 5 years
- Collateral required
- Personal guaranty required
Bonds: Tax-Exempt or Taxable
The GCEDC helps facilitate the financing of larger (greater than $1 million) capital investments for industrial or qualified non-industrial projects through issuance of taxable or tax-exempt industrial development (revenue) bonds (IDB or IRB). Bond financing through the GCEDC is a financial vehicle used to substantially reduce the cost of borrowing for qualified companies. Construction, acquisition and renovation of real property as well as the purchase of machinery and equipment are all eligible projects. IDB financing also provides companies with exemptions from project-related sales and use taxes, exemption from the mortgage tax capital investment and real property tax abatements.
Financing/Capital Formation Requirements -- Tax-Exempt and Taxable Bonds
Requirements:
- Capital Investment project must approach at least $1 million to be cost effective
- Private placements of bonds are also available
- For Tax-Exempt bonding, a company may NOT have had more than $10 million in actual and planned capital investment expenditures (including actual amount of bond issue) within the same municipality going 3 years back and 3 years forward
Terms:
- Interest rates are generally 2 - 3% below a taxable loan from commercial lenders
- May be structured as a fixed rate, variable rate or low floater bond
- Fixed rate and variable bonds can be structured with maturities ranging from 15 - 30 years
Small Cities (CDBG) Grants
The Small Cities Grant (CDBG) is a federally funded program that provides grants to smaller communities to foster capital investment and job creation and to expand business opportunities for implementing a variety of community and economic development activities. These activities are focused towards neighborhood revitalization, economic development, improved community facilities and services.
Financing/Capital Formation Requirements -- Small Cities
Requirements:
- Company must be located in Genesee County and making a capital investment into the organization that will result in the creation or retention of at least 7 new jobs
Terms:
- Money may be in form of low interest loan or grant (GCEDC determined)
- Minimum grant/loan of $100,000
- Maximum grant/loan of $750,000
- Maximum of $15,000 per job created/retained (low to moderate income)