Allen McConnell
Manager
Minority Business Development Division
(614) 752-4833
The program provides fixed, low-interest rate loans to certified minority-owned businesses that are purchasing or improving fixed assets resulting in creating new jobs for Ohioans. The Minority Business Direct Loan Program determines the eligibility of a business by:
In its review of loan applications, the office also evaluates the management capacity of the company, the availability of working capital, and the overall ability of the company to repay its debt. These criteria are designed to provide a more definitive review of the applicant's need and capabilities.
The State's financing is take-out financing. In other words, the business will need to complete its project utilizing interim financing from a conventional lender, and its equity. When the project is completed, the State's funds will be released.
Funds received under the Minority Direct Loan Program may be used for part of the cost of acquisition, renovation or construction of depreciable fixed assets.
This includes the following categories:
In addition, limited soft costs related directly to the fixed asset expenditure may be included. Examples of eligible soft costs include: architectural/engineering costs; installation costs for machinery; and financing costs for bank loans.
Minority Direct Loan funds may not be used for:
Eligible borrowers include any operating business certified by the Ohio Department of Administrative Services State Equal Opportunity Coordinator as a Minority Business Enterprise (MBE) and demonstrate that its fixed asset expansion/retention project will create or retain jobs for Ohioans.
The Minority Business Direct Loan Program may lend funds to businesses engaged in commerce, manufacturing, research and development or distribution.
Under Ohio Revised Code Chapter 122.76 (A), other eligible borrowers include Community Improvement Corporations and Ohio Development Corporations.
** Guidelines used by the Minority Business Development Division normally limit the loan amount to $450,000. However, the Director of the Ohio Development Services Agency may authorize a higher loan amount or modified terms which address a unique and demonstrated economic development need.
The interest rate for Minority Direct Loan financing is currently set at a fixed rate of 3 percent.
The term on the Minority Business Direct Loan will be based upon:
The term on a Minority Business Direct Loan cannot:
** Guidelines used by the Minority Business Development Division normally limit the loan amount to $450,000. However, the Director of the Ohio Development Services Agency may authorize a higher loan amount or modified terms which address a unique and demonstrated economic development need.
Bank | 50% |
Owner’s Equity | 10% |
Minority Direct Loan | 40% |
Total | 100% |
The State may request any of the following as collateral or security for the financing invested in a project:
The Minority Direct Loan Program requires the payment of two fees:
Companies receiving assistance under the Minority Direct Loan Program are not required to complete their project utilizing the Ohio Prevailing Wage for construction, renovation and machinery installation.
The following areas will be evaluated by the Ohio Development Services Agency staff in making a determination that the business is eligible to receive Minority Business Direct Loan financing: