Loan Application in WORD format Loan Application in PDF format

A critical part of helping to expand entrepreneurship and small business on Maryland’s Eastern Shore is access to capital. Many individuals looking to start or expand a business can find themselves challenged in obtaining traditional financing, such as through banks. For this reason, ESEC administers and manages a portfolio of Revolving Loan Funds (RLF) that helps supply small businesses and entrepreneurs with the nontraditional kind of financing needed to start or expand their business.

2017 Application Deadlines – January 12, February 23, April 06, May 18, June 29, August 10, September 21, November 02.

NOTE:  Applications to the Kent County RLF must be received 2 weeks prior to application deadlines to facilitate Kent County’s technical review process

ESEC’s Portfolio of Revolving Loan Funds (RLF) includes a number of funds. Each RLF comes from a different funding source(s) and has different funding objectives and service areas. Please refer to each RLF to determine which coincides with your possible loan request for your business.

sba logoDHCD logoDorchester countykent county

Video Lottery Terminal Funds – A portion of the funds from video lottery terminals (slots) located at Maryland’s casinos is deployed to small, minority and women-owned businesses located throughout Maryland.  Contact the following VLT Fund Managers directly for information and details.

Anne Arundel County Economic Development Corporation (Annapolis)
Maryland Capital Enterprises (Salisbury)
Meridian Management Group (Baltimore)

Angel and Venture Investment Opportunities – Another option for more high-growth and scalable startups are area angel investment and venture capital groups.  Each has their own investment priorities and procedures, so contact them individually to express interest and obtain details.

PinOak Capital (Eastern Shore)
Baltimore Angels (Baltimore)
Mid-Atlantic Venture Association (Washington, DC region)

General Eligibility and Application Guidelines for all loan funds in ESEC Portfolio

Application Process

1) Loans to Small and Startup Businesses

  • Loan amounts of $10,000 to $100,000 (amounts may vary per loan fund)
  • Priced at or below current market interest rates (i.e. 5% to 7%)
  • Eligible purposes: business acquisition, commercial real estate acquisition, building improvements, equipment purchase, leasehold improvements, business startup costs, refinancing of existing debt, except refinancing where the lender is in position to take a loss, and working capital
  • Eligible entities include startups and existing businesses
  • Use of standard underwriting practices; factors to be considered include repayment capacity, financial strength of the company and guarantors, industry and management experience, and collateral protection
  • Post-closing: servicing, loan monitoring, billing, and collections administered by ESEC staff

Loan Requirements

  • Personal credit (600 or above)
  • Collateral required when available
  • All owners over 20% must personally guaranty the loan
  • Life insurance on owner/guarantor where no valid succession plan is in place
  • Minimum equity injection of 10% for startup businesses
  • Business plan and financial projections required for start-up businesses

2) Loans to Businesses with High Growth Potential

  • Loan amounts of $50,000 to $200,000
  • Priced at or below current market interest rates (i.e. 5% to 7%)
    Eligible purposes: business acquisition, commercial real estate acquisition, building improvements, equipment purchase, leasehold improvements, business startup costs, and working capital
  • Eligible entities include promising early stage companies to help attract follow-on funding from venture capital firms, angel investors and other sources
  • Use of standard underwriting practices; factors to be considered include repayment capacity, financial strength of the company and guarantors, industry and management experience, and collateral protection
  • Post-closing: servicing, loan monitoring, billing, and collections administered by ESEC staff

Eligibility Criteria for High Growth or Technology Businesses

  • Ideal applicants will meet most or all of the following criteria:
  • High potential early stage company with clear path to follow-on funding, particularly engaged in but not limited to aerospace, cybersecurity, energy, life sciences or health IT
  • Affiliated with a business incubator or coworking space that is a member of the Maryland Business Incubation Association (MBIA) is preferred, but not mandatory
    Defendable intellectual property with clear ownership or licensing arrangement
  • Team led by an experienced entrepreneur or demonstrates willingness to acquire needed management talent
  • Recognizable $20 million addressable market
  • Cash flow break-even is reached within 18 months

3) Excluded Transactions and Industries

  • Financing existing debt where the fund is in position to take a loss
  • Loans to effect ownership change that will not benefit the business
  • Loans for the reimbursement of funds owed to an owner or reimbursement of equity injection
  • Loans for repayment of delinquent state or federal taxes
  • Non-owner occupied real estate
  • Firms involved in speculative activities that develop profits from fluctuations rather than the normal course of trade
  • Firms involved in lending activities
    Pyramid sales plans
  • Firms involved in gambling activities
  • Adult bookstores, other adult entertainment facilities, gun shops, liquor stores, pawn shops, tanning salons, tattoo parlors and check-cashing services

4) Application Process and Fees

  • Seven (7) application deadlines are established at the start of each calendar year for the submission of loan applications.
    NOTE:  Applications to the Kent County RLF must be received 2 weeks prior to application deadlines to facilitate Kent County’s technical review process.

2017 Application Deadlines – January 12, February 23, April 06, May 18, June 29, August 10, September 21, November 02.

  • Submitted loan applications must be complete and survive a technical review. Based upon loan request, ESEC will make recommendations as to which loan fund within ESEC Portfolio of funds will be used for funding an application.
  • A $100 Application Fee must accompany all applications.
  • Any loan applications found to be incomplete are returned to the applicant without consideration. Returned applications may be resubmitted by a future deadline.
  • Accepted applicants are then scheduled to appear before ESEC’s Loan Review Committee which meets seven (7) times per year, two weeks after application deadline. The Loan Review Committee is made up of regional entrepreneurs, attorneys, financial and marketing professionals, and economic development service providers.
  • Each interview lasts approximately 45 minutes, allowing 15 minutes for the applicant to make an oral case in support of their application followed by 30 minutes of Q&A by the Loan Review Committee.
  • Applicants are ordinarily notified within two days as to the Loan Review Committee’s decision.
  • Approved loans are ordinarily closed within ten (10) days of notification.
  • A 1% Origination Fee is added to loan principals at closing.