How to Apply
The following items must be submitted to the City of Charlotte for consideration for participation in the City’s Business Equity Loan Program:
- COMMITMENT LETTER FROM A LENDER specifying a commitment to make a loan to the Borrower “contingent upon the City approving a loan in the amount of ($XX,XXX).” Lender must contact the City to learn if the project is eligible for City participation prior to issuing their commitment letter.
Businesses that are interested in talking to the City about eligibility prior to approaching a bank about a business loan may contact Eric Nelson with Neighborhood & Business Services at 704-336-2735.
- A BUSINESS EQUITY LOAN APPLICATION from each member of the small business concern requesting assistance, including guarantors. An application must be filled out and submitted by:
- If a sole proprietorship by the proprietor
- If a partnership by each partner
- If a corporation, by each officer, director, and additionally by each holder of 20% or more of the voting stock.
- If a limited liability entity by each member and/or manager.
- All Guarantors
The City will provide application forms to applicants after the Lender’s loan commitment letter is received. The City will not consider applications received from applicants without a financing commitment from a Lender, (see no. 1, above).
- PERSONAL FINANCIAL STATEMENT for each Applicant, including Guarantor’s. The Financial statement must be provided to the City on a City or Lender approved form, and must demonstrate that each Applicant’s personal net worth does not exceed $750,000 as defined by the City’s program guidelines.
- BUSINESS FINANCIAL STATEMENTS All of the business and project information, including projections, provided to the bank for review must also be provided to the City for consideration and review. A copy of the Lender’s credit analysis and write-up memorandum should also be provided. Typical project and financial information consists of:
- Business Plan including Executive Summary, Management Background, Business & Industry Review; SWOT Analysis
- Project Sources and Uses of Funds
- Historical business and personal financial statement – 3 years
- Projections – 2 years
- Written documentation of JOB CREATION or JOB RETENTION must be provided at the time of application.
- COPIES of Credit Reports, Appraisals, Surveys, Environmental Reports, Leases, etc., as may be requested by the City from time to time.
- ADDITIONAL ITEMS as may be requested by the City from the Applicant(s) and/or Lender in the City’s sole discretion.
HOW THE PROGRAM WORKS
- Applicants apply for a business loan directly to a Bank of their choice.
- Banks use their established underwriting criteria when reviewing a loan request. A lender's decision to provide Bank loan funds is made at the sole discretion of the Bank. If the applicant meets all of the Bank's underwriting criteria, yet during the project analysis the Bank identifies a gap in project financing, the Bank requests the City to participate in the project to help fill the identified gap. The Bank loan must be contingent upon City approval to participate in the project.
- A Bank's request for City participation in the project is made in the form of a loan commitment letter from the Bank, to the Applicant, that includes a contingency clause stating that "the Bank's loan is contingent upon the City approving a Business Equity Loan in the amount of $(XX,XXX)." The Bank loan is contingent upon City approval to participate in the project. The Bank provides the City with a copy their commitment letter with the contingency clause.
- The City verifies the applicant's eligibility for the program by requesting additional information from the Bank and Applicant. Each Applicant completes and provides the City with a City program application form after the bank loan commitment is secured.
- The Bank or Applicant will be contacted for additional information as needed. Loan requests are typically processed within 3 weeks but may take longer depending upon the amount of the loan requested and/or the complexity of the project.