Loan Program
Introduction
The MCOG loan program is designed to provide gap financing for small business development. This can include existing small businesses focused on expanding existing operations, delving into new markets, or upgrading their existing facility efficiencies to increase productivity. Loan making can include new business ventures that have been well thought out, include advanced product or process development, come with a complete business plan, an understanding of the market entry, and have a projected 3-year cash flow, with first year monthly estimates.
MCOG has a specialized loan program involving brownfields. See our page here or reach out to Max Johnstone if you have questions about remediation and/or development of a brownfield site.
Loan Process
MCOG utilizes a traditional loan approval process. Applicants apply through the Maine Funding Network where applicants will be asked to complete a common loan application and match with MCOG as a lender. The application, along with supporting documents, will be presented to the MCOG Loan Committee (a subcommittee appointed by the MCOG Board of Directors) for consideration. Staff will provide a traditional underwriting report, along with a required credit report for the applicant. The loan committee will approve that application, set appropriate conditions and proceed to the closing with a third-party attorney review.
In exchange for the risk of gap financing, MCOG will seek collateral to guarantee that risk. MCOG will be flexible in the assessment of collateral value but will work with the applicant to assure repayment.
The applicant is expected to pay for the credit report, legal costs associated with closing, and an application fee as appropriate.
Loan Region
Your business must be located in this region to qualify for a loan from MCOG.
Loan rate: prime minus 2
The MCOG loan rate is typically set at 2 points below the prime lending rate. Within that framework, loan start-ups can be flexible. MCOG will consider, for example 0%, interest only payments for up to 6 months to assist in initial cash flow. That flexibility will be established through conversations with the client and the underwriting process.
Similarities and differences between public and private lenders
MCOG’s financing role is to fill a gap that traditional lenders are unable to close because of the lenders’ internal underwriting requirements. MCOG’s loan package works well with other public or private lenders. MCOG typically takes a subordinate position, reflecting the inherent risk in providing gap financing. That being said, the loan committee weighs that risk against the applicant’s due diligence, the market they are attempting to expand or enter into, and their experience and history in the field.
As opposed to traditional financing, MCOG makes loans by accessing previously revolved loan funds, or through access to funding sources such as the USDA RMAP or the Northern Border Regional Commission programs. MCOG tailors the loan resource to the specific ask or geographic location of the applicant.
Eligible use of funds
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Business assistance, including gap financing and microloans
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Real Estate Acquisition for owner occupants
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Building Improvements
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Furniture, Fixtures & Equipment
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Inventory & Supplies
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Working Capital
Small business resources
Technical Assistance
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SCORE: Score Maine offers free business mentoring and business workshops in the state of Maine. Free Business Counseling. Free Business Advice. Free Workshops Webinars.
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Coastal Enterprises Inc: Offers a variety of business financing and advising services with specialties in woman-owned businesses, agriculture and aquaculture, childcare serivces, and more.
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New Ventures Maine: NVME empowers Maine people to define and achieve their career, self-employment, and financial goals. Through free classes and individual coaching, NVME help people find success in their careers, start and grow small businesses, and gain financial stability.
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Small Business Development Centers: The Maine SBDC program helps build and strengthen small businesses through business advising, training and educational resources. Certified business advisors provide guidance on topics such as business feasibility, business plan development, capital acquisition, financial management, marketing and sales, e-commerce, customer service, personnel management, small business strategic planning and more.
Loan Programs
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Community Concepts: a leading financial resource for Maine businesses. Business Advisors work one-on-one with individuals looking to start a new business, expand their current business, or acquire an existing business to determine their specific needs. Every loan client gets access to Technical Assistance provided free of charge.
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Coastal Enterprises Inc: Offers a variety of business financing and advising services with specialties in woman-owned businesses, agriculture and aquaculture, childcare serivces, and more.
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The Finance Authority of Maine (FAME): FAME helps Maine businesses and families achieve a brighter future through business and education financing. To meet the financing needs of Maine’s business community, FAME offers a wide array of business assistance programs, higher education finance programs, financial education programs.
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Eastern Maine Development Corporation: EMDC operates a variety of programs including personal advising, government contracting, supportive services, and workforce assistance.
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Kennebec Valley Council of Governments (KVCOG): KVCOG provides financing assistance for start-ups, expansions and modernizations throughout the region. Funding for the agency’s lending, grant and technical assistance programs are secured through a mix of State and federal loan and grant programs and strategic partnerships.
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Maine Technology Institute (MTI): We support new or substantially improved products, processes, or methods with the potential to grow and diversify Maine’s economy and increase the number of quality jobs throughout the state. We do this through direct support of innovators and through support of programs and infrastructure that encourage innovation.