Who is eligible?
- With a single exception for childcare centers, all microloan borrowers must be a for profit business. All non-profit childcare centers are eligible to borrow; however, no other type of non-profit business is eligible.
- The business concern must meet size eligibility standards (visit www.SBA.gov for a listing of these standards)
- The business must meet certain types of business requirements. Any legal, for-profit, small business is eligible to make an application. The form of the business, whether a proprietorship, partnership or corporation, is not a determining factor.
How much can I borrow?
The maximum amount a business is allowed to borrow is $35,000. If the total cost of a project exceeds $35,000, SBA funds can be leveraged up to a 2:1 ratio. In such a scenario, the maximum financing may not exceed $105,000. That is, a maximum Microloan of $35,000 coupled with a maximum of private sector funds of up to $70,000.
What are the terms and Interest Rate?
- The maximum allowable term for a Microloan is six years (72 months)
- All loans must be short-term, fixed rate and may not be revolving lines of credit
- Borrower must certify that they are not more than 60 days delinquent in paying their child support
- The interest rate will be determined at the time of approval, however rates cannot be greater than:
- 8.5% over our cost of funds for loans $10,000 or less
- 7.75% over our cost of funds for loans over $10,000
What fees can I expect to be charged?
Borrowers should expect to pay any third party charges customarily and routinely associated with a loan closing, such as the cost of credit reports, closing attorneys, UCC filings, etc. Also SBA allows a once a year contribution from each micro-borrower of up to $100. RCAP Solutions Financial Services, Inc. requires a $50 fee at the time of application. If the loan is not approved, the fee will be returned to the customer.
What are eligible uses of funds?
Proceeds of micro-loans may be used for working capital, inventory, supplies, furniture, fixtures, machinery and/or equipment. In no case shall the proceeds of a micro-loan be used as a down payment for the purchase of real estate or to purchase real estate.
For more information, please contact Brian Scales, 978-630-6649, Email: bscales@rcapsolutions.org