Access to Capital & Business Loans
Gaining access to capital can be a rather complicated and confusing task—and it can be very frustrating at times. Whether a business needs financing to obtain working capital, increase capacity, fulfill a specific order, or for many other reasons, borrowers must be able to be able to convince potential lenders that loans will be repaid in full by a specific time. All lenders will have very specific criteria that must be met. It is important to know and understand what is required by potential lenders and to be able to financially prepare the business to be attractive to potential lenders down the road.
Obtaining financing often goes beyond searching through banks and traditional lenders. The NH Business Resource Center partners with many other agencies throughout the state to deliver solutions specific to each businesses’ needs. Investors and angels are an option, as are these programs:
- Industrial Revenue Bonds: This program is only for companies that manufacture or produce tangible personal property in New Hampshire. At least 75% of bond proceeds must be spent on core manufacturing space and equipment. Storage, office and R&D space must be excluded from this calculation. To be cost effective, loans must be between $1.5 and $10 million. The interest rate is about 70% of prime and can be used for the purchase of land, buildings, and capital equipment.
- Loan Guarantees: For companies that need credit enhancement, the State offers the Capital Access Program, Working Capital Line of Credit Guarantee, and Guarantee Asset Program.
- Import/Export Loans: The State also offers Foreign Buyer Credit, Export-Import Bank of the United States and other sources.
- SBA 504 Program: This loan program is designed to work in conjunction with commercial banks to provide 90% long-term, fixed-rate financing for small to medium-sized businesses in owner occupied buildings that provide employment opportunities.
- Community Development Block Grant: This assistance can be in the form of a grant to the municipality for a public infrastructure improvements on behalf of an expanding business or a loan to the business itself. The maximum amount of funding available for any given project is $500,000, regardless of size of the community applying for the grant. All grants are one-year duration, and one job must be created for each $20,000 in CDBG funds granted. The key to this federal program is that a minimum of 60% of the jobs created must be filled by low and moderate-income persons. More information can be found on the NH Community Development Finance Authority website.