The Ohio 166 Regional Loan Program is a State-funded loan pool that can finance up to 40% of the total cost of a business capital investment project at fixed, below market interest rates with a lower down payment. OSDC offers this loan program to businesses (except retail) in ALL Ohio counties.
What is a 166 Loan?
- Direct loan to businesses whose customers are primarily other business (no retail operations) for $25,000 – $500,000.
- The interest rate is below market and fixed for the loan term that can be up to 20 years depending on the assets being financed.
- The 166 loan can share the lien position or take a subordinate position to the Third Party Lender.
- A 166 loan can be the only lender and fund up to 75% of project costs.
How it works: OSDC partners with a participating lender to provide an appropriate financing solution. The 166 program prefers a shared collateral position with the participating lender, but will take a subordinate lien. This increases the loan processing fee from 1.5% to 2.5%.
Business requirements include:
- primarily manufacturing, research and development and distribution businesses; retail businesses are ineligible
- owner-occupied commercial real estate
(75% new construction; 51% existing building)
- typically must be a for-profit business
- Job creation/retention requirements apply. $50,000/job is a target, but can be higher depending on the project
Eligible projects include:
- land and/or building purchases
- machinery & equipment purchases
- building construction and/or renovations
- long-term leasehold improvements
- purchase of existing business’ fixed assets
Loan amount available is 40% of total project cost up to a maximum of $500,000. Participation of up to 75% of total project cost may be considered with a 25% equity contribution.
Equity injection from 10% to 25% of the total project cost is required.
Minimum collateral requirements: OSDC/Ohio Development Services Agency prefers a shared mortgage and/or lien position that is established via an intercreditor agreement between participating lender, OSDC, and borrower. A second lien can be considered with a 1% additional loan processing fee. Personal guarantees of owners greater than 20% are generally required.