The city’s Revolving Loan Program (RLP) provides commercial loans to Portland businesses to facilitate economic growth and job creation. Loans are made to all types and sizes of businesses, from the smallest establishment to the largest corporation. They range from as much as $250,000 to as little as a few thousand dollars.
Businesses are encouraged to establish relationships with banks and credit unions, and to access conventional financing whenever possible. The city’s RLP is here to assist when there’s a financing gap or when businesses are not able to access conventional financing. Most RLP loans are provided as gap financing in which the city’s lending board, the Portland Development Corporation (PDC), partners with a lead lender (generally banks, credit unions and other community lenders). For start-ups and even existing businesses that cannot obtain conventional financing, direct loan assistance is available, particularly through micro loans.
Loans from the city’s RLP can help to fund a wide range of activities. These include building construction and renovations, leasehold improvements, machinery and equipment purchase, permanent working capital (e.g., inventory and receivables), purchase of an existing business, refinancing (if the project also includes a business expansion component at least 25% over the debt amount to be refinanced), acquisition of fishing vessels and marine related machinery and equipment, acquisition of real estate.
Fixed interest rates are set by the PDC, the city’s lending board. The PDC reviews the interest rate policy generally twice a year. The current policy is prime plus 2% for most of the programs within the RLP. Within that range, the rate for each particular loan will depend upon a variety of considerations, such as anticipated job creation and retention, type of business, collateral, level of risk, credit worthiness, etc.
An overview of each of the loan programs within the city’s RLP follow.
60/30/10 Portland Business Program
Loan of $50,000 to $200,000
60% lead lender (with possible guarantee from SBA or FAME), 30% City, 10% equity from borrower
Flexible terms up to 20 years with a 10-year balloon
Especially useful for projects between $250,000 and $500,000 for which the SBA 504 may not be cost effective
May be used for working capital
No prepayment penalties
Micro Business Loan Program and Creative Economy Loan Program
Loans up to $50,000
Maximum loan term up to 7 years
Prefer minimum private investment to Micro Loan dollar ratio of 1:3 (for example, $30,000 project: $22,250 Micro Loan, $7,500 borrower)
Real Estate Development Loan Program
Loans up to $200,000
Can be used to finance non-owner occupied real estate
Minimum private investment to RLP ratio of 1:1, including minimum 10% equity investment from borrower
Current interest rate policy is prime plus 2-4%
Maximum loan term of 30 years with 10-year balloon
Cannot be used for refinancing
Regional Economic Development Loan Program (FAME)
Loans up to $250,000
Maximum loan term of 20 years with 10-year balloon
Maximum loan amount relative to project cost is as follows:
Loans of less than $50,000 may be for the total amount of new funds being provided to borrower
Loans of $50,000 - $100,000 may not exceed ½ of the net new funds being provided to borrower
Loans over $100,000 may not exceed 1/3 of the net new funds being provided to borrower
Loan Application Applications to the city’s RLP require the same materials that a bank would request, for example, historical financials, projections, and personal financial statements, along with business plans when the applicant is a new business.
Please contact the city’s Business Programs Manager Nelle Hanig at 207-756-8019 with any questions or to discuss a possible loan.