McLean County Micro-Lending Program

The McLean County Small Business Micro-Lending Program is established to provide a source of financing, which may not otherwise be available within the county, for expanding or start-up businesses. Used to fill a "financing gap" in a business development project, the micro-loan offers a low-interest option to complete a financing package. A “gap” occurs when the business lacks the funds to meet the equity requirements of bank financing or needs a lower interest rate.

Further, this program seeks to:

  • Retain and attract businesses that provide permanent jobs
  • Maximize investment within the County
  • Promote sales and tax generating projects
  • Provide financial assistance to eligible businesses

It is the intent of the micro-lending program to view both existing and start-up businesses as equal under the criteria, with preference given to expansions and start-ups resulting in retained or new jobs and/or new sources of economic activity within McLean County.

McLean County Small Business Micro-Lending

Start-up businesses up to $25,000 available
Established businesses up to $50,000 available
Credit builder loans from $500 to $3,500
with 6 to 72-month terms
Interest Rate Variable, generally 150 basis points
below market
Term 7 – 15 years (based on project)
Fees Borrowers must pay one-time 10 percent closing fee if approved; no application fee assessed
Collateral Required, Flexible (based on project)
Business Plan Required
Time for Process 45-60 days after approval

Important Details

  • Application: Applicants are urged to complete the application in conjunction with assistance of EDC and Small Business Development Center (SBDC) staff.
  • Time frame: This application must be presented by email or other digital transfer to the Small Business Development Center (SBDC) at Illinois Wesleyan University, Bloomington, for first review.

    The SBDC will submit this application to the Bloomington-Normal Economic Development Council for presentation and review by the Community Development Corporation (CDC). This process typically
    will take approximately two weeks.

    The CDC will make a recommendation to the McLean County Board’s Finance and Executive committees. After their approval, the full McLean County Board will act on the application. This
    portion of the review should last about 30 days.

  • Confidentiality: All information submitted relating to this application is subject to the Freedom of Information Act. Confidentiality cannot be guaranteed.

Documents Required

PURCHASE ITEM DETAIL: Please describe each capital item to be purchased with McLean County Loan funds. Include descriptions of the items along with all salient information (supplier,
serial numbers, original manufacturer etc.). Include a time sequence for when these items will be purchased.

JUSTIFICATION FOR PUBLIC FINANCING: Please provide a letter from your participating lender stating why this project is seeking County loan funds. This letter can be sent either electronically or through the mail.

INCOME/CASH FLOW STATEMENTS: Actual/Projected/Year-to-Date (3 years past/forward)

BALANCE SHEET: Business Actual/Projected/Year-to-Date (3 years past/forward)

PERSONAL FINANCE STATEMENT

FEDERAL TAX RETURNS: Business and Owners for 3 years past

SCHEDULE OF DEBT: Mortgages, loan agreements, promissory notes, liens

SCHEDULE OF COLLATERAL: valuations/description of asset, appraisals, titles

LEGAL DOCUMENTS: Corporate bylaws, partnership agreements, leases

START UP BUSINESS: Business Plan and monthly income statement in year one

 

All documents must be in electronic format (email, file share, etc.)

Micro-Lending Program -- Frequently Asked Questions

Who is eligible for this program?

Although the program is not primarily driven by credit scores, an applicant‘s score will determine the maximum amount of the considered loan. The interest rate is individually determined by the McLean County Board. McLean County provides loans at a rate 1.5 percent (150 basis points) below market as determined by the County. Factors include type of business, term of loan, credit score, and any specific case impacts determined.

Are there any restrictions on the loan?

The loan proceeds must be used for business purposes only, including equipment purchases, inventory, leasehold improvements, working capital, purchase of an existing business, or other basic business needs.

Why do I need a business plan?

McLean County will require a business plan if the operation has been open for less than six months. The business plan does not have to be lengthy but should include a marketing strategy and 12 months worth of cash flow projections, detailed by month.

Is there an application fee?

McLean County does not charge an application fee. However, if the request is approved, the County will charge a one-time closing fee of 10 percent. Commitment fees may be added to the loan - requiring minimum out-of-pocket expense at the time of closing.

Is any collateral required?

Collateral is required for most loans; however, the program allows for flexible options. McLean County may also require a cosigner in some cases.

Do borrowers have to pay the money back?

Yes. Micro-loans are just like any other loan – borrowers must repay the principal and interest. This is not a grant program.

How can I apply for a micro-loan?

Prospective borrowers should contact the Small Business Development Center at Illinois Wesleyan University. Generally, applicants can begin the application process only after they have discussed micro-loan participation with the SBDC. The first step is to arrange a meeting with a staff person at SBDC.