Ohio 166 Loan Program

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%.

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.


  • $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
  • 0.25% annual servicing fee for life of the loan (included in the interest rate)
  • Reasonable legal, closing and related costs

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. $75,000/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 Department of Development 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.