Revolving Loan Fund Portfolio -

Does Your Small Business On The Eastern Shore Need Financing?

Apply for a loan from our Revolving Loan Fund (RFL). Scroll down for more details.

Revolving Loan Fund Portfolio

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.

Application Deadlines – Currently, there are no deadlines. Applications are received on a rolling basis.

CONTACT: You are welcome to email Mark Greene, Loan Coordinator, with any questions.

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.

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 business

2) Loans to Businesses with High Growth Potential

Loan amounts of $10,000 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 agriculture, aquaculture, biotechnology, energy, or life science.
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

Applications are accepted anytime on a rolling basis. Applications are typically reviewed and decided within 2 to 3 weeks of receipt of a completed application. Incomplete applications will not be accepted and will be returned to the applicant without consideration.
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.
Typically, applicants will have pursued traditional bank financing prior to applying to ESEC. At least two traditional financing rejections are requested prior to applying to ESEC.
Any loan applications found to be incomplete are returned to the applicant without consideration. Returned applications may be resubmitted.
Accepted applicants are then scheduled to appear before ESEC’s Loan Review Committee. 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.

Does Your Small Business On The Eastern Shore Need Financing?