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Jump Start Loan Program

Program Description

The purpose of the City of Utica JumpStart Micro-Enterprise loan program is to encourage and support small existing and start-up business enterprises and provide new job opportunities and broaden the tax base of the City of Utica. The JumpStart loan program will support micro-enterprises with 1-5 employees. The Program will provide small loans of up to $5,000.00 to those eligible applicants who have completed a technical assistance component and who agree to utilize on going technical assistance from local business support entities such as the Entrepreneur Center, WORC, SCORE or the NYS Small Business Development Center. The JumpStart loan program will provide primary and subordinate financing opportunities not normally available through traditional lending channels.

Loan Types

The Jump Start Loan Program will typically provide Medium term loans (3-5 years) for working capital, equipment and inventory.  Short-term loan, with a term of less than one year will be available and will be considered Business Opportunity loans.

Eligibility Requirements

•  Project must be located in the City of Utica.

•  Applicant must submit, along with application, a completed business plan that has been prepared with the assistance of the Entrepreneur Center, WORC, SCORE or the NYS Small Business Development Center.

•  The project must result in the creation or retention of low/moderate income persons identified by HUD guidelines. If the business is not hiring new employees or retaining employees, the business owner must qualify as a low/moderate income individual.

•  Funds can be used only for For-Profit enterprises that are in the retail, service, manufacturing or construction sectors. 

•  A Micro-Enterprise can be a sole proprietorship, partnership, corporation, LLC, or LLP.

•  Traditional funding sources for the business are unavailable.

Ineligible Activities

•  Program loan funds will not be used for projects or activities that consist primarily of investing, speculation or real estate for primary ownership purposes or for sale or investment.

•  No Illegal activities will be allowed.

•  Applicants will not be accepted where the applicant and/or proposed business activity ineligible for assistance under the Small Business Act as amended and further described in Chapter 1 of Title 13, Code of Federal Regulations and in Chapter 1, section 3 of the Standard Operating Procedures of the Small Business Administration.

•  Loan funds used for the refinancing of existing debt.

•  Loan funds used for the payment of delinquent federal, state or local taxes.

Employment Standards

•  An eligible Micro-Enterprises loan candidate must create or retain a least One permanent full-time equivalent position.

•  A permanent full-time position must consist of a total of 35 work hours. Two part-time positions that total 35 hours per week will be considered as one position.

•  The permanent job(s) must meet the HUD Low/Moderate income standards.

Loan Standards

Loan Amounts

Minimum loan amount - $1,000.00

Maximum loan Amount - $5,000.00

Equity Contribution

Borrower must provide a minimum of a one–to-one dollar match or investment into the business. The dollar match can be in the form of cash available to fund the project or cash already expended to fund the project. (ie. Equipment already purchased, that is used primarily for business purposes and is available for collateral)

Loan Terms

Working Capital Loans – 3-5 years Maximum

Equipment Loans – 5–7 years Maximum

Business Opportunity Loans – 12 months Maximum

Interest Rate

The Current Wall Street Journal Prime Lending Rate at the time of closing.

Loan Documentation 

JumpStart Loans will be closed by the City of Utica Department of Urban and Economic Development. Loan Closing Documentation will include:

1)  Credit report (Minimum Fair – Isaac Score of 550)

2)  Lien Search

3)  Proof of Asset Ownership and/or proof of Equity Contribution

4)  Evidence of Insurance

5)  Loan Agreement

6)  Promissory Note

7)  Security Agreement

8)  Personal Guarantees

9)  First Source Agreement and Job Documentation

Personal Guarantees

Personal Guarantees are a statement of commitment by the borrower to repay the loan. All borrowers will be required to personally guarantee the loan and provide with the business plan a personal financial statement on SBA Standard PFS Form. 

 

Please contact Jack Spaeth - Economic Development Program Specialist at 315-792-0195 or at jspaeth@cityofutica.com to discuss your project and how the JumpStart Program can assist.