166 Loan Eligibility & Process
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.
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.
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
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)
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 on an exceptional basis.
Equity injection from 10% to 20% of the total project cost is required.
Minimum collateral requirements: OSDC/Ohio Department of Development prefers a shared mortgage and/or lien position established via a intercreditor agreement between participating lender, OSDC, and borrower. A second lien may be considered on a case by case basis with a 1% additional loan fee. Personal guarantees of owners greater than 20% are generally required.
Costs to the borrower:
- $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
- reasonable legal & closing costs
Interest rate is fixed, between 2% and 8%.
Loan Terms – Maximum 15 years for Real Estate; generally, 7 years for Machinery and Equipment. Cannot exceed participating lender loan terms.
Prepayment penalties do not apply.