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Business Equity Loan
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About the Business Equity Loan Program

The Business Equity Loan Program seeks to stimulate small business investment, create and retain jobs, and provide increased opportunities for small businesses to obtain the capital they need to be successful. The program seeks to accomplish this by partnering with conventional, private-sector lenders in making loans to eligible small businesses in Charlotte.

Eligible Businesses

  • Start-up and expanding for-profit service, retail, and manufacturing businesses needing additional equity to qualify for primary financing from a Bank and who meet all of the City's program guidelines are eligible to apply.
  • Businesses located outside of the Business Corridor Revitalization Geography must be in one of the following sectors: Health; Defense; Energy/Environment; Finance; Motorsports; Manufacturing.
  • Business owners must have less than $750,000 of personal net worth.
  • Prohibited businesses include adult oriented businesses, nightclubs, bars, hotels/motels, tattoo parlors, body-piercing shops, check cashing, pawnshops, car sales lots, gambling including but not limited to internet sweeps and cafes, businesses operating from residential property, non-profits, and any non-conforming uses.
Eligible Geography
The program is available city-wide, with special consideration given to projects located in the City's Business Corridor Revitalization Geography.
  • Businesses must be operating from commercial property; projects that represent residential uses or residential zoning are not eligible.
  • Businesses located outside of the Business Corridor Revitalization Geography must be in one of the following sectors: Health; Defense; Energy/Environment; Finance; Motorsports; Manufacturing.
  • Learn if you are located in the Business Corridor Revitalization Geography
Job Creation and Retention
A minimum of one (1) new full-time equivalent job must be created or retained for every $65,000 of City loan funds. Additional consideration is given for manufacturing firms.
    Maximum Loan Amounts
    Maximum Loan Amounts are based upon a number of factors including the Bank loan amount, jobs being created or retained, and location of the business:
    • The City loan will not exceed the total Bank loan amount.
    • A borrower's cumulative City loan(s) cannot exceed $100,000. Manufacturing businesses have a maximum limit of $150,000.
    • For projects located within the Business Corridor Revitalization Geography, the City loan can be up to 40% of the total project costs.
    • For projects located outside of the Business Corridor Revitalization Geography, the City loan can be up to 25% of the total project costs.

    Example Inside Corridor Geography:

    Bank Loan (50%):           $125,000
    City Loan (40%):             $100,000
    Borrower Equity (10%)    $ 25,000
    Total Project Cost:           $250,000

    Example Outside Corridor Geography:

    Bank Loan (65%):            $162,500
    City Loan (25%):              $ 62,500
    Borrower Equity (10%)     $ 25,000
    Total Project Cost:            $250,000

      Loan Terms
      Principal repayment of the City's loan is typically deferred for 1 - 3 years based upon project analysis and underwriting as conducted by the City.
      • During the deferral period the City will require a minimum monthly payment; this payment may consist of interest-only payments based on the current prime rate.
      • Upon expiration of the deferral period the Borrower is required to begin Principal and Interest (P&I) amortization of the loan, typically priced at the then current prime rate and not to exceed prime + 1.00%.
      • Typical loan term is 10-years, including the deferral period, though longer or shorter terms can be considered based upon project underwriting and generally accepted commercial loan underwriting guidelines.
      Additional Terms
      • Collateral - Collateral is required. Maximum loan-to-value is 100%.
      • Personal guaranties - Personal guaranties of all principals are required.
      • Credit - Borrower and principals of business must have reasonable credit. Positive cash flow and acceptable debt coverage required. Loan applicants will undergo credit and background checks. All personal and business federal, state, and local taxes must be paid
      • Real estate - Loans involving real estate must be a minimum of 51% owner occupied.
      • Fees - Borrowers are responsible for all loan closing and legal fees.
      Program Benefits
      Benefits of the program include, among others:
      • Improved cash flow
      • Reduced borrowing costs
      • Lower funding requirements
      • Flexible repayment terms

      Downloads

      Download the Program Fact Sheet

      Check program eligibility on the Business Corridor Revitalization Map

      Additional Information

      For additional information, contact Eric Nelson at enelson@charlottenc.gov or 704-336-2735.

      Other Resources

      For help developing a business plan and much more visit CharlotteBusinessResources.com.