Information on Loans

The Small and Minority-Owned Business Program defines a loan as Program Funds lent for a specific project for which the Applicant has requested Program Assistance. For a business to participate in the loan section of the Program it must meet the SMOB Program criteria, as well as, the criteria of the designated lender serving their specific region of the State.  Lender critera varies from region to region, the Small and Minority-Owned Business Program criteria for loans consideration is as follows:

Loan Criteria

1.  The following criteria shall apply when Qualified Organizations evaluate Applications for Loans:

    (a.)  Maximum Loan Amount:  One hundred twenty-five thousand dollars ($125,000).

    (b.)  Loan Interest Rate: May be a fixed rate or variable rate, provide the variable rate does not exceed the maximum rate.

    (c.)  Maximum Loan Interest Rate:  2% over the “Prime Rate” as published in the Wall Street Journal.

    (d.)  Minimum Loan Interest Rate: 2% under the “Prime Rate” as published in the Wall Street Journal .

    (e.)  Fees: Late charges and other fees may be imposed in accordance by Tennessee law. 

    (f.)  Term: The recommended repayment periods for loans are as followed: 

        1.  Equipment, the lesser of five (5) years or useful life;

        2.  Working capital, supplies, and inventory, three (3) years; and

        3.  Other business-related activity:  Lesser of five (5) years or useful life.

    (g). Collateral and Security:  Both business and personal collateral may be taken as security for a loan.

    (h). Guaranty Agreement:  Personal guarantees from all principal owners shall be obtained.