Benefits to Borrowers and Financing Partners
Benefit For Businesses:
- Save money through lower interest rates.
- Financial stability through longer fixed rate interest periods (15 to 20 years on real estate).
- Keep more cash in-hand through reduced cash-in requirements:
1. Typical project requires only 10% cash-in from borrower.
2. Many soft costs can be financed rather than paid for out of pocket.
Benefits For Financial Institutions:
Improves Asset Quality:
1. Lower risk exposure through reduced loan-to-values. Typical Project:
- 50% Financial Institution
- 40% CREDC (subordinated debt to the financial institutions 1st position lien)
- 10% Cash from borrower
2. Less volatility in debt service for the credit through long-term fixed rates/payments.
3. Improves working capital and liquidity of the borrower through lower cash-in requirement.
- Competitive Advantage: Offer your borrower reduced cash-in requirements, lower interest rates, and long fixed interest rate periods for a portion of the financing.
- Relationship Building: Borrowers appreciate being provided the best alternatives to their financing needs.
The Capital Region Economic Development Corporation (CREDC) has a variety of loan programs available for area businesses. CREDC’s Business Finance staff will work directly with the applicant to guide them through the application process, while working hand-in-hand with the applicant’s financial institution. If you are interested in learning more about these loan programs, please call Melissa McLaughlin, Director of Business Finance at (717) 213-5042 or use the E-mail Us link at the top of the page.