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Does my business qualify for a KEDFA small business loan?
At McBrayer, we realize that small businesses are the backbone of America. That is why we thoroughly enjoy helping entrepreneurs get on their feet and open their door to business. Whether it is starting or expanding a company, our corporate law attorneys can aid in every step of the process. One of the biggest obstacles in opening a small business is acquiring adequate funding. It is important to know what financial resources are available and whether your business qualifies for them. One such resource is the Kentucky Economic Development Finance Authority's ("KEDFA") Small Business Loan Program.
The KEDFA Small Business Loan Program is regulated by KRS 154.12-325 and 154.12-330. KEDFA's loan terms may be more lenient than industry standards, but there are several criteria that must be met for participation.
First, of course, the business must be "small." That means, under the statute, that there are 50 or fewer employees of the business at the time of application. Second, the business must be engaged in manufacturing agribusiness or service and technology. Lastly, at least one new full-time job must be created by the business within one year of the loan closing date.
If the business qualifies for loan funds, the funds may be used for acquiring lands or buildings, the purchase of machinery, working capital or any other expense deemed reasonable by the KEDFA. The funds cannot be used to refinance or restructure existing bank debt. Loan amounts range from $15,000 to $100,000, with a fixed interest rate and terms ranging from 3-10 years. KEDFA secures the loans with the highest lien position available.
Interested businesses must complete an application; staff-recommended loans are then reviewed and approved or denied at a monthly KEDFA Board meeting. If you would like to know more about the KEDFA small business loan or other financial resources for small businesses, contact the attorneys at McBrayer today.
James H. Frazier, III is the Managing Member of the firm, a position he has held for over 18 years. Mr. Frazier's practice focuses on real estate, bankruptcy, mergers and acquisitions and general corporate practice with special emphasis on mineral and energy law. He can be reached at firstname.lastname@example.org or (859) 231-8780, ext. 303.