For the purpose of expanding the City’s economic base, generating and retaining local jobs, and enhancing Oxford as a location for tourism and economic opportunity, the City establishes the Oxford Revolving Loan
Fund to financially assist local businesses in growth, expansion, and renovation. An RLF is one that continually uses principal and interest revenues as they are received from outstanding loans to replenish the fund and make loans to other eligible borrowers.
Summary
The Revolving Loan Fund (RLF) uses recaptured monies from loans initially made with Competitive Economic Development Community Development Block Grant funds to provide direct loans of up to $10,000 to small businesses. These loan funds are to be used to assist in the renovation or improvement of an existing, and the retention of permanent jobs for low to moderate-income individuals. Projects appropriate for this loan type include, but are not limited to; purchase or replacement of equipment, addition of management or service systems, renovation or remodeling projects, etc. The loans will be below prevailing interest rates to enable the completion of applicable projects.
Administration
The RLF will be administered by the Oxford Community Improvement Corporation (CIC), a non-profit organization made up of representatives of the city government and the community. The CIC will review loan applications and make recommendations on them to the Oxford City Council, which will authorize them.
Targeting
The CIC will target its RLF financing to borrowers engaged in business for profit, whether commercial or industrial, in the City of Oxford. RLF borrowers may be incorporated, a partnership, or a sole proprietor. The RLF will target its funds to businesses which reinforce the City’s economic development goals within Oxford’s Comprehensive Plan.
Goals & Objectives of RLF
The goal of the RLF is to create or retain private sector jobs, particularly for low and moderate-income persons.
The objectives of the RLF are to:
- To identify and promote economic development goals within Oxford’s Comprehensive Plan
- Stimulate the expansion of the City’s economic base
- Provide gap financing for projects where private sector and other public sector financing and owners’ equity are insufficient to cover project costs
- Provide below-market interest financing for projects that have concomitant public benefit
Requirements for RFL Loans
The minimum standards for projects utilizing the RLF portfolio are as follows:
Loan Amount/Usage
Up to Ten Thousand Dollars ($10,000) may be loaned for small projects completed for the purpose of job retention.
Proportion of Low and Moderate-Income Jobs
A majority (51%) of the jobs retained by the total of all projects financed with RLF monies must be directed to low and moderate income persons. A low and moderate annual wage shall not exceed the most recent U.S. Department of Housing and Urban Development Section 8 Housing Income Limits for a family of four (4) for Butler County. The RLF staff will update the city website annually and RLF application forms with the most recent HUD income limits.
Eligible Activities
These loans are to be used for small improvement projects that allow for staff retention.
Ineligible Activities
Ineligible loan activities of uses of RLF funds include financing of existing debts, non-capital equipment and training costs.
Other Standards
Once a loan has been approved and the project is completed, the borrower shall not change the location of the business, nor plant facilities nor offices, out of the City of Oxford. Any such changes or relocation shall constitute a default under the loan agreement and all sums advanced by the RLF shall be due immediately.
Financing Policies
Average Loan Size
Loan amounts may be up to Ten Thousand Dollars ($10,000). The total amount of all “Improvement and Retention” loans ($10,000 and under) shall not exceed Two Hundred Thousand Dollars ($200,000).
Term of Loan
The RLF program financing will be offered for a term determined to be necessary and appropriate. The term will generally be four (4) years or less.
Rate of Interest
The interest rate for all loans shall be set by the CIC Loan Committee dependent on the financing needs of the business for the project.
Loan Security
Loans are secured in one or more of the following manners:
- Universal Commercial Code filing
- Personal guaranty of owner(s)
Creditworthiness
The RLF program is a lending program for healthy and expanding small businesses. Loans will be made to businesses with a good credit history and excellent potential to fulfill loan obligations. A thorough credit analysis will be performed on every loan applicant.
- Applicants must demonstrate ability to operate the business
- Applicants must have enough capital so that, with a RLF loan, the borrower can operate on a sound financial basis.
- Applicants must show that the proposed loan is of sound value or so secured as to reasonably assure repayment.
- Applicants must show that the past earnings record and/or future prospects of the company indicate ability to repay the loan and other debt out of profits.
Special Financing Techniques
All loan payments shall be made on a monthly basis. The City may, at the request of the borrower, renegotiate the terms of the loan where unforeseen circumstances have arisen which make renegotiation necessary.
RLF Administration
Under the direction of the City Manager, the Economic Development Director Department will administer the RLF program for the City of Oxford. The RLF administration is substantially in compliance with federal regulations for the CDBG program.
Loan Administration Board and Loan Committee
The Oxford Community Improvement Corporation (CIC) will serve as the loan administration board.
- The CIC will, by majority vote, appoint three of their members, including the Executive Director, to the RLF Loan Committee which will review the loan request and conduct an analysis of the loan application.
- The CIC Board will review the recommendation of the RLF Loan Committee and recommend approval or disapproval to City Council. If more applications are received than funds available, the CIC shall rank the applications according to priority and that ranking will be submitted to the City Council. The City Council makes the final decision on the loan based upon the recommendation of the CIC.
The CIC will review any changes in these procedures for the RLF program. Such changes will then be brought to the City Council which will adopt them by resolution.
Staff Assistance
The Economic Development Department (RLF staff) will assist the CIC and potential loan applicants. This department is responsible for client relations, application review, credit analysis, loan packaging, processing and servicing. In addition:
- The department will monitor compliance with this Revolving Loan Fund Program and all governing Regulations of HUD.
- The department shall report each year on the success of the RLF program by reporting the annual amount of money loaned from the RLF fund, the number of new businesses that utilized RLF funding, and the number of full time equivalent jobs created or retained by RLF loan recipients that continue to do business in Oxford.
- The department shall annually update the most recent S. Department of Housing and Urban Development Section 8 Housing Income Limits for a family of four (4) for Butler County in the RLF application.
- The department is also responsible for maintaining all accounting records of the RLF program.
Any legal work needed is performed by the City of Oxford’s legal counsel.
Recapitalization Strategy
The RLF program continually uses principal and interest revenues as they are received from outstanding loans to replenish the fund and to make loans to other eligible borrowers. Because of the nature of the Fund, shorter term loans are preferred; a longer term means that the Fund will not be replenished as quickly. All monies shall remain in the account until the amount reaches the sum needed to loan to the next applicant [minimum: Ten Thousand Dollars ($10,000)].
There are two strategies to accelerate recapitalization of the RLF: (1) Offer a lower interest rate for a shorter term loan; (2) Encourage machinery and equipment loans which typically have shorter (5-7 years) terms.
Sources of Funding to Cover Administrative Costs
When payment on a loan is made, the RLF is replenished. Interest on the investment account, interest earned on RLF loans and loan fees are sources of funding to cover administrative costs for the RLF program. In addition, up to ten twenty percent (20%) of CDBG monies may be used for administrative costs, including the RLF program.
The application fees are intended to cover the cost of the credit analysis. Loan principal and interest are to make other loans. Interest earned on the account may be used to cover staff expenses to operate the RLF (e.g., advertising expense).
Loan Approval Process
- During this interview, or shortly thereafter the business should present the Revolving Loan Fund staff with a completed application that includes the following:
- Completed Application Form
- Previous Year Profit Loss Statement for Business
- Previous Year Business Balance Sheet
- Personal Financial Statement
- A copy of their three credit reports, available free annually from annualcreditreport.com
- The application and financial statements are reviewed by the RLF staff to determine if the necessary and appropriate qualifications are The staff then reviews the company’s ability to repay the loan, and formulates a recommendation to the CIC Loan Committee.
- The CIC Loan Committee approves or disapproves the request for a loan and sets the terms of the loan agreement based on the financing policies stated in this The CIC Loan Committee also determines the manner in which the loan shall be secured.
- Upon approval, a recommendation is made by the CIC Board for resolution to City Council for their approval.
- Upon receipt of the Council resolution approving the loan, the RLF staff proceeds in having the following documents executed:
- Commercial Note
- Loan Agreement
- Security Agreement; if applicable
- Signed copies of Agreement of Compliance and Assurance of Compliance for Nondiscrimination
- W-9
Loan proceeds for the purpose of purchasing equipment are not released until the equipment is in place and has been inspected by the RLF staff
Other Requirements
Default Requirements
A RLF loan project must be within Oxford. Included in the loan agreement will be a statement of default. The statement provides that the debtor shall keep the collateral separate and identifiable at the address shown and will not remove the collateral from the address without the City’s written consent. The debtor shall be in default under the loan agreement if any representation or statement made to the City proves to have been false in any respect.
View the Improvement & Retention Low Interest Loan Program Application
Improvement & Retention Low Interest Program FAQ
An applicant for this grant program must meet ALL of the criteria listed below
- Applicant must have a physical, non-residential location within the incorporated limits of Oxford, Ohio.
- Applicant must be registered with the State of Ohio as one of the following;
- A revenue generating business
- A non-profit organization
- Applicant business must have been in continuous operation for at least the previous 12 months.
- Applicant must provide taxable wages for one or more “I-9” eligible and “W-2” documented employees.
Funds may be used for business improvement projects, including, but not limited to;
- Improvements and renovations to the interior of a business location.
- Improvements and renovations to the exterior of a business location, including signage.
- Addition or replacement of equipment, furniture, fixtures, etc.
- Management systems or software for point-of-sales, staffing, payroll, etc.
Program funds cannot be used for the purposes including, but not limited to;
- Financing existing debt.
- Purchase of inventory.
- Payroll, staff training, or certification costs.
- Licensure or permit payments for staff or business operations.
Applicants must provide the following to be considered for an award:
- Description of your business and related industry
- Description of the intended use of funds
- For construction or renovation projects
- Current digital photos of all building areas which will receive improvements.
- Estimates for project costs, including but not limited to;
- Signed vendor estimate(s) with detailed costs for each proposed improvement.
- Cost estimates for goods, equipment, supplies, etc. needed to complete the project
- For management systems or software costs
- Description of system or software you intend to purchase
- Description of the impact the addition of such systems or software will have on your business operations or management
- Financial documents outlining current management of the business and related revenues and expenses
- Documentation regarding creditworthiness and sustainable level of current debt-to-income
- Documentation showing the businesses ability to repay a potential loan award
- Applicants must show an earnings record and/or future prospects of the company indicate ability to repay the loan and other debt out of profits.
- Completed IRS Form W-9 Request for Taxpayer Identification Number and Certification.
You can access a fillable application PDF through our website or by contacting Economic Development Specialist Seth Cropenbaker at SCropenbaker@CityofOxford.org
Once completed, applications and documentation may be submitted in one of three ways.
- All materials may be submitted in-person to the City of Oxford Municipal Building at 15 S. College Ave. to the first-floor Utility Billing reception area,
- Please mark your materials “to the attention of Seth Cropenbaker”.
- All materials may be submitted via traditional mail to the City of Oxford Municipal Building at 15 S. College Ave. Oxford, OH 45056.
- Please mark your materials “to the attention of Seth Cropenbaker”.
- All materials may be submitted via email to Seth Cropenbaker at, SCropenbaker@CityofOxford.org.
Yes, while a thorough and complete application can expedite this process, many business owners will need to develop their application over time. We are here to support you and your business, including assistance in completing your Revolving Loan Fund application.
To discuss the Revolving Loan Fund Program, or submit an application contact Seth Cropenbaker at, SCropenbaker@CityofOxford.org.
Loan awards vary based on the details of your request in the application. The total available funds through the Improvement & Retention Loan Program is $10,000.