Government > Departments > Development and Planning > Business Loan Programs

Business Loan Programs

ALDC Revolving Loan Fund
Lending Policies & Guidelines (Amended 11/27/2001)

Goals & Objectives

Through its lending capacity, the Albany Local Development Corporation (ALDC) aims to facilitate the creation of new employment opportunities and the retention of existing jobs. Furthermore, the ALDC seeks to encourage investment that will expand the commercial and industrial tax base for the City of Albany.

Appropriate Determination

• Applicants must operate within the City of Albany or directly benefit the citizens of the City of Albany
• Project must have a significant economic impact to the City of Albany as defined by the Goals and Objectives
• Projects must create or retain (1) one full-time equivalent job for every ($35,000) thirty-five thousand of funds borrowed
• Borrower must demonstrate, but for the ALDC loan assistance, the project could not be undertaken

Eligible Activities

• Acquisition of real property
• Procurement of machinery and equipment
• Construction, renovation or rehabilitation of real property
• Purchase of fixed assets
• Consideration of retail or restaurant establishments will only be given if the project includes the improvement of real estate and achieves the Goals and Objectives of this policy

Ineligible Activities

• Interim construction financing
• Refinancing or retirement of existing debt
• Acquisition of non-fixed assets
• Financing of tax delinquencies
• Distribution of proceeds to owners, shareholders or investors

Requirements

• A minimum of 10% owner equity contribution
• Projects must generate sufficient cash flow to provide adequate debt-service coverage
• ALDC loan funds should leverage other financial resources
• Personal guarantees from all owners/investors/partners with a 20% or larger stake
• Participation of conventional lenders may be required as a source of funds
• Key Person Life Insurance may be required

Loan Terms

• Maximum Loan Amount: $100,000
• Loans are limited to 50% of the total project cost
• Interest Rates: Determined on a case-by-case basis
• Considering risk, exposure & current market analysis
• Real Estate: Not to exceed a 20 year term
• Machinery & Equipment: Not to exceed 5,7 or 10 years
• ALDC will take into consideration the useful (or IRS) life of the asset being financed and/or used to provide collateral coverage

Underwriting Criteria

• Loan applications will be reviewed based on the following:
• Feasibility
• Economic Impact
• Public Benefit
• Credit Worthiness
• Repayment Ability
• Acceptability of Collateral
• Need

The ALDC applies certain financial underwriting criteria standards that applicants must consider. Generally, these standards are:

• 1.05:1 debt-service coverage ratio
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