Q: Who is eligible to apply for the program?
A:Small businesses domiciled in Louisiana (see the Small Business Administration's definition of a small business).
Q: Does the borrower have to create new jobs with a startup, expanding or acquisition business?
A:The business must either create or retain one job for loans under $100,000 or two jobs for loans above that amount.
Q: Does the borrower initially contact the bank or lending institution to apply for a guarantee?
A:The borrower is required to contact the bank or lending institution directly to apply. The lender then works directly with LEDC.
Q: Are there any program fees?
A:There's no application fee. The guaranty fee may be waived (determined by risk).
Q: How long does the process take?
A:It takes anywhere from one to three weeks to process a guaranty. The specific length of time is determined by the approving body that is required for the guaranty. Loans for $500,000 or less will have a quicker turnaround.
Q: Is there a maximum loan amount?
A:There is no maximum loan amount. However, maximum guarantee amount is $1.5 million dollars.
Q:What types of financing are eligible in the Small Business Loan and Guaranty Program?
- Revolving Lines of Credit
- Fixed assets purchases
- Purchase or construction of building (limited to 51% applicant occupancy)
Q: What types of businesses are not eligible in the Small Business Loan and Guaranty Program?
- Restaurants (regional or national franchises will be considered)
- Bars and saloons
- Gaming businesses
- Real estate speculations
- Recreational, theme or amusement parks
- Parks or camping facilities
Q: How much equity does a business need to be eligible for a LEDC Guarantee?
A: The minimum equity requirement for a startup business or business acquisition is 20%. Existing businesses must have a 15% equity injection. Equity is defined as:
- Paid-in capital
- Paid-in surplus and retained earnings
- Partnership capital and retained earnings
Q: Who determines if a small business owner gets approved for a loan?
A: This program is administered by Louisiana Economic Development through the Louisiana Economic Development Corporation, which will make decisions as to the approval of the loan guaranty. However, the bank or lending institution makes all decisions relevant to the approval of the loan.