The City of Hamilton's Revolving Loan Fund (RLF) provides low interest loans for expansion projects by private, for-profit businesses occurring in Hamilton. Loans are made primarily for the purchase of machinery and equipment, although purchase, renovation and/or construction of buildings are also eligible.
Business Benefits
The RLF offers two primary benefits to existing Hamilton businesses and/or those companies choosing to relocate to Hamilton. The RLF allows for a lower down payment (usually around 10%) of the project cost in equity than traditional commercial financing, allowing companies to conserve their cash to ensure steady and profitable growth. In addition, the RLF offers below market interest rates on loans. The exact rate for each loan will be determined on a project specific basis.
Typical Project Structure
A typical RLF project will be structured with 10% equity, 40% RLF, and 50% from a private lender. The maximum loan amount for any project through the RLF is $100,000. The Department of Economic Development will work closely with the business' private lender throughout the project.
Hiring Requirements
A minimum of one job must be created or retained within three years for each $15,000 of RLF funds invested in the project. At least 51% of these jobs must be made available to or held by low/moderate income persons.
Collateral Position
Typically, the private lender will have the primary collateral position on the asset that is financed. The City will typically requires a secondary collateral position and personal guarantee. The City may also require additional collateral to secure its loan.
Application Process
Once a project is determined to meet the necessary financial and program requirements, it proceeds through a two-step approval process. First, the Hamilton Community Improvement Corporation reviews the application and provides a recommendation to the City Council. Second, the City Council must formally approve the loan. The total approval process is estimated to take between sixty and ninety days. Once this occurs, the project may begin. The loan is closed and funds are disbursed when the project is completed.
Reporting Requirements
Annually, each recipient of a loan through the RLF will be required to submit employment documentation to verify compliance with the job creation requirements. The business must also submit periodic financial statements during the loan terms. Additional documentation may also be required, on a project specific basis.
City of Hamilton Utility Assistance
The City of Hamilton owns and operates the four primary utility services within the City: electric (generation and distribution), natural gas (distribution), water and wastewater. Because the City operates these municipal utilities, the City can provide greater flexibility and service to its customers than traditional investor-owned utilities, with high reliability. The City of Hamilton has agreed in concept to work with Vora Technology Park and future tenants, from the outset of the project, to ensure ways to control and lower utility costs as the facility expands in Hamilton. For example, City Council recently passed electric rate restructuring legislation with an economic development objective targeted at larger customers, allowing for significant cost savings to be realized by efficient operators. The City would welcome the opportunity to review individual utility needs and specifications to potentially provide a customized agreement for utilities at the facility.
