Loan Guidelines

 
 

Who Qualifies?

  • Most startup or expanding small businesses who are creating or retaining jobs in the incorporated areas of rural Shawnee Co. plus the economically distressed areas in Topeka

 
 

 Loan Size

  • $5,000 to $75,000

  • The E-Community funds can be no more than 60% of the total loan amount. The remainder must come from a financial institution and/or a local/regional public source of capital.

Use of Loan Proceeds includes but is not limited to

  • Purchase of business equipment

  • Purchase of business inventory

  • Working capital

  • Improvements to owned real estate

  • Real estate, when partnered with commercial lender

 
 

Fees

  • $200 Application Fee

  • $500 closing cost for loan of $20,000 or less

  • $750 closing cost for loan over $20,000

 
 

 Eligibility

  • Startup or growing businesses who may not meet regular bank lending criteria, but which have a track record of paying their bills on time and which have reasonable prospects of being able to repay a loan

  • Demonstrate ability to pay back the loan

  • Preference will be given to borrowers of startup businesses who complete an approved business training class

 
 

Terms for Most Loans

  • Fixed interest rate minimum 3% or higher based on use of funds

  • 12 to 84 month principal and interest

  • Startups only, option for interest only payments for first year

  • No penalty for early repayment

  • Direct loan costs are paid by the borrower (credit reports, closing fees, attorney fees, etc.)

 
 

Businesses That Do Not Qualify

  • Non-profit organizations

  • Academic institutions

  • Gambling concerns

  • Floor planning concerns (I.E., wholesale auto inventory financing)

  • Speculative concerns

  • Lending or investment institutions

  • Multilevel marketing or pyramid sales

 
 

Collateral

  • Collateral required – provide detailed list

  • Assets purchased with loan may be used as collateral

  • Borrower is required to sign a security agreement that pledges all unsecured assets necessary as collateral and a personal guaranty agreement

 
 

Credit History

  • Full credit history is obtained from Experian by loan committee including credit score

  • Applicant must show credit worthiness

  • Explainable circumstances are taken into consideration

 
 

Applicants Who Are Not Eligible

  • Past due on school loans

  • Past due on child support payments

 
 

Loan Funds May Not Be Used For:

  • Paying off existing debt

  • Salary or owner’s draw

  • Down payment on real estate

  • Payroll, property taxes or any other back taxes

  • Personal vehicles

  • Refinance existing debt

  • Personal housing rent or mortgage payments

 
 

What to Include in Loan Application:

  • Application form with fee

  • Business plan, which includes financial projections (monthly cash flows for a year, balance sheet and income statement for 3 years)

  • Current personal financial statement

  • Statement of personal work history

  • Past 3 years’ personal tax returns

  • Past 3 years’ business financial statements, if applicable

  • Year-to-date business financial statements, if applicable

  • List and valuation of collateral

  • Proof of business insurance

 

Apply NOw

Shawnee StartUps Loan Fund Application