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Loan Program

Loan Program

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UPPER COASTAL PLAIN COUNCIL OF GOVERNMENTS is pleased to offer a loan program to create and maintain employment in Edgecombe, HalifaxNashNorthampton, and Wilson Counties. 

The primary purpose of this fund is to stimulate private investment and leverage additional funds and resources through partnerships with other lending, grant and technical assistance institutions

We provide convenient, affordable, and flexible access to capital for small businesses, entrepreneurs, and other eligible entities working to start, expand and/or sustain a business.  

COMMERCIAL LOANS from $20,000 to $150,000!
Loans will ordinarily be made between $20,000 and $150,000.  Generally, the RLF investment will be up to 33% of the total project cost or $150,000.  We can work with your local bank or provide references to other lending partners to help meet other borrowing needs.

Interest Rates: The interest rate on loans are indexed to the prime rate  published in the Wall Street Journal and will generally be at a fixed-rate between four (4) to eight (8) percent.  Interest rates for loans are determined based on many factors including but not limited to assessment of risk, collateral, borrower credit and repayment history, projected cash flow, and other terms and conditions of the loan.

Credit Not Otherwise Available: Applicant must demonstrate that credit is not otherwise available on terms and conditions that permit the completion or successful operation of the activity to be financed.  This does not include portions of the project that are funded, fundable, or offered as leverage.

Equity Requirements:  Equity requirements for loans will vary with the strength of the loan request and the financial condition of the borrower. Consideration will also be given to the age of the business, the experience of the borrowers, current economic trends in the industry and the overall condition of the economy. Borrower must invest at least 10% cash in any fixed asset loan. In the case of working capital loans, a firm’s working capital (current assets – current liabilities) may be used in lieu of its cash injection as long as it is at least 10% of the loan request.  

Environmental Impact: UCPCOG must comply with applicable federal, state and local environmental laws and regulations, including to review the impacts of prospective loan proposals on the physical environment. Potential borrowers must comply with applicable environmental laws and regulations.  If a federal, state or local environmental impact statement or analysis has not been performed for the project, then the loan applicant must complete a Request for Environmental Information. UCPCOG will determine if an environmental study is required. 

Loan Application: The loan applicant must complete a full RLF application and provide the following:
(1)   Personal financial statement and three-years personal tax returns,
(2)   Three-years business tax returns,
(3)   Three-years business financial statements including balance sheets, income statements and cash flow figures,
(4)   Description of the project with cost estimates, assumptions and projections,
(5)   Board minutes authorizing the credit request and a corporate resolution indicating who can borrow on behalf of the corporation,
(6)   Copies of organization papers for non-corporate business entities including general partnerships, limited partnerships and LLCs,
(7)   Copies of permits and licenses pertaining to the company,
(8)   Current debt schedule and an aging of accounts receivable,
(9)   Signed Certification of No Conflict of Interest

Other Required Items
a)   UCPCOG requires a personal and corporate credit report on both the principal(s) and any guarantor(s).
b)   A residential appraisal is required on loans secured by personal real estate and a commercial appraisal is required on loans secured by business real estate.
c)   Equipment is appraised by someone with industry experience.
d)   A title insurance policy (preliminary and final) is required.
e)   Hazard insurance is required on all property taken as collateral.
f)    Flood hazard insurance is required on improved real estate if any part of the property is located in the 100-year flood plain.
g)   Key man insurance is required on the principal borrowers.
h)   When personal property is taken for security on a loan, a lien is recorded on the certificate of ownership and recorded with the issuing agency.
i)   UCC financing statements are used to record security interests in property whose ownership is not evidenced by a certificate of ownership and filed at the state and county levels.
j)   The property owner signs a security agreement to indicate that a security interest in the property has been given to the RLF.
k)  To take a proper security interest in an account or insurance policy, an assignment form must be signed by the registered owner(s), recorded in the proper office and acknowledged by the account or policy issuer.
l)   Davis-Bacon. All laborers and mechanics employed by contractors or subcontractors on construction-related projects shall be paid wages not less than those prevailing on similar construction in the locality.  Where the land facilitating construction is purchased in part or in whole, this requirement extends to construction work, 
including that which is not directly paid for with loan funds.

Ineligible Uses of Loans:  
Loan funds cannot be used by borrower to:
(1)   Acquire an equity position in a private business.
(2)   Subsidize interest payments on an existing loan.
(3)   Meet the requirements of equity contributions under another Federal agency’s loan program.
(4)   Enable a borrower to acquire an interest in a business through the purchase of stock or through the acquisition of assets unless acquiring the business to save it from imminent closure or to facilitate a significant expansion or increase in investment with a significant increase in jobs. 
(5)   Provide funds to a borrower for the purpose of investing in interest-bearing accounts, certificates of deposit, or any investment unrelated to the loan.
(6)   Refinance existing debt, unless:  (a) borrower sufficiently demonstrates a “sound economic justification” for the refinancing (e.g., the refinancing will support additional capital investment intended to increase business activities). Reducing the risk of loss to an existing lender(s) or lowering the cost of financing to a borrower shall not, without other indicia, constitute a sound economic justification; or (b) finance the purchase of the rights of a prior lien holder during a foreclosure action which is necessary to preclude a significant loss UNLESS funds used for this purpose have a high probability of receiving compensation from the sale of assets sufficient to cover costs plus a reasonable portion of the outstanding loan within a reasonable time frame.
(7)   Serve as collateral to obtain credit or any other type of financing without prior written approval (e.g., loan guarantees).
(8)   Finance gambling activity, performances or products of a prurient sexual nature, or any illegal activity, including the cultivation, distribution, or sale of marijuana that is illegal under Federal law.
(9)   Non-relocation: Induce the relocation of existing jobs within the U.S. that are located outside of UCPCOG’s jurisdiction to within its jurisdiction in competition with other U.S. jurisdictions for those same jobs.

Technical assistance is offered to persons interested in starting or expanding a business in conjunction with a loan request. Services include assistance with business planning, financial projections, and marketing plan development.  Additional Fees may apply.

For additional information contact:

Ron Townley, Loan Officer