Ohio 166 Financing Structure

OSDC partners with a participating lender to provide the appropriate financing solution. The lender holds a first or shared first mortgage and/or lien filing and OSDC/SBA provides permanent financing that can be subordinate.

  • A bank or other lender provides 50% of the required financing for an eligible project.
  • OSDC provides up to a maximum of 40% of required financing for the purchase, construction or improvement of fixed assets.
  • The business contributes a minimum of 10% as an equity injection.

Fees

  • $500 non-refundable application fee
  • processing fee of 1.5% of 166 loan portion if secured with first lien position
  • processing fee of 2.5% of 166 loan portion if secured with second lien position
  • 25% annual servicing fee for life of the loan (included in the interest rate)
  • Reasonable legal, closing and related costs

Example Project: Acquisition of land and building for $500,000.00

Uses Sources
Bldg Acq. $500,000

 

50% Bank $250,000
40% 166 $200,000
10% Equity $50,000
Total      $500,00  

$500,00

1) Closing Costs: The closing costs will fluctuate as determined by attorney fees, title insurance cost and recording fees. A maximum amount of $2,500 can be financed and added to the loan amount for closing costs.

2) Summary of Fees for Real Estate:

 

Fee Shared 1st lien Shared 2nd Lien
Application Fee $500 $500
Processing Fee $3,000 $5,000
Closing Costs $2,500 $2,500
Total Cost of Fees: $6,000 $8,000

 

2) Summary of Fees for Equipment:

 

Fee Shared 1st lien Shared 2nd Lien
Application Fee $500 $500
Processing Fee $3,000 $5,000
Closing Costs $500 $500
Total Cost of Fees: $4,000 $8,000

 

 

Interest rate is fixed, below market.

Loan Terms – Maximum 20 years for Real Estate; generally, 7 years for Machinery and Equipment, but term can match average useful life of the assets.

Prepayment penalties do not apply.