The City of Eau Claire Micro Loan Fund is a public financial initiative designed to support startups, newly established businesses, or expanding small businesses that have been in operation for 3 years or less. By offering smaller loans, the program allows businesses that may face challenges accessing traditional financing to build credit, while helping to boost development, enhance the community’s well-being, and ensure broader participation in the city’s economic prosperity.
Accessible Financing
Businesses can apply for loans ranging from $5,000 to $30,000, making capital more attainable for small businesses.
Fixed Interest Rate
Loans are offered at a 4% fixed annual rate, providing predictable and manageable repayment terms.
Diverse Use of Funds
Loans are eligible for uses from permanent working capital to real estate, offering flexibility to meet various business needs.
Flexible Repayment Terms
Loan terms range between 3-10 years tailored to the use of funds, allowing businesses to play for repayment.
Credit Building Opportunity
Loans are available to new and expanding businesses, enhancing their future borrowing potential as they grow.
Economic Inclusion
The program reduces barriers to financing, promoting broader participation in Eau Claire’s economic prosperity.
Loan Amounts
The minimum loan will be $5,000 and the maximum will be $30,000.
Interest Rate
The interest rate shall be a 4% fixed annual rate. The Finance Director will review the program’s interest rate annually as compared to market conditions and recommend changes, if any, to the Loan Administration Board, who shall have the authority to adjust the rate accordingly.
Terms
The terms of the loan will vary depending on the collateral and use of funds. Short terms will be encouraged. Typical loan terms are 10 years for real estate purchases or renovations, 3-10 years for capital equipment, or 3-5 years for working capital. If it is determined by the Loan Administration Board that deferral of the principal payment for a period not to exceed 1 year would likely lead to the success of the project, and that upon review of updated financial information filed by the borrower that loan collateral remains a viable and likely source of recovery in case of default, deferral may be allowed as approved by the Board.
Collateral
The City will record a lien against the collateral pledged for the loan. The collateral pledged must be sufficient to cover the value of the loan and be related to the business activities covered by the loan or other real property. Unlimited business and personal guarantees will also be required of all owners with a 20% or greater ownership interest in the business.
The City’s Economic Development staff will review the applicant’s materials to ensure accuracy and completeness. They will then bring the application forward to the City’s Loan Administration Board, who will review the entirety of the application and approve or deny the loan request.
Eligible Borrowers
Any manufacturing, commercial, or service business, excluding restaurants, located in the City of Eau Claire that has been in business for three (3) years or less and demonstrates an ability to repay the loan. Targeted economic areas for the program include businesses located in Downtown Eau Claire and those supporting the creative economy.
Eligible Uses of Funds
Permanent working capital; inventory purchases and supplies; acquisition of equipment, machinery, furniture and fixtures; leasehold improvements; building renovation and rehabilitation; and real estate acquisition.
Ineligible Uses of Funds
Refinancing existing debt. However, upon Board approval, RLF borrowers may move the loan to a different financial institution if the City’s lien position will not be compromised. Relocation of companies located outside the City of Eau Claire.
Follow these steps to apply for the financing options offered by the City of Eau Claire.
Determine Eligibility
To begin the application process, reach out to our division via email or phone call. Our team will help you review the guidelines for each loan program to find the right financing option for your business and will make recommendations depending on factors such as your income, collateral, business type, and intended use of the loan funds.
Complete an Application
When a loan program has been selected, our team will provide the application and next steps. Carefully fill out all sections of the form, gather all necessary documentation listed on the checklist included in the application, and submit all of your materials via email or in person. We will then review all of the materials you provided to ensure they’re complete.
Present to the Loan Board
Once your application is ready, we will invite you to present before the Loan Board. At this meeting, board members will review your application and ask questions so they understand the intended use of the loan funds. They will then deliberate and deliver a decision by the end of the meeting or request more time.
Sign Loan Documents
If your loan is approved, the Finance Department will extend a final offer outlining the interest rate, terms, and conditions of the agreement. Read these documents carefully and ask any questions you have before signing. Then sign and return them to the Finance Department.
Receive Funds
Once the loan documents have been signed, you will receive the loan funds as outlined in the agreement, usually within 1-2 months. Be sure to only use the funds for their intended purpose and adhere to the repayment schedule so you can maintain a positive credit history and avoid any potential penalties or fees.
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