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Frequently Asked Questions for Businesses: General
Other Business QuestionsEligible Businesses
No, the loan is made by your lender. We stand behind the loan with a guarantee. What is a guarantee and how
does it differ from a loan? A loan is a direct financing commitment where a lender disburses money to a borrower under terms outlined in a Promissory Note. A guarantee is a pledge of support on a bank loan. WHEDA guarantees a portion of a loan made to you by your local lender. Your lender applies to us for a guarantee on your loan. Is there a maximum total project
cost? No, the maximum guarantee is the lesser of 80% of the loan or $600,000. Our guideline is a minimum of 10% (15% for start-ups) of the total project amount. If you don't have the minimum amount of equity we will still consider your application but will look for strengths in the credit that will offset the equity shortfall. Forms of equity other than cash can be used toward your total project amount. Who sets the terms and conditions
on a WHEDA guaranteed loan? You and your lender will negotiate the terms, including the interest rate, on each guaranteed loan. All terms are subject to approval by WHEDA. How does WHEDA decide if they
will guarantee my loan? After determining eligibility, we look at the credit of the borrower and the business, including debt service, management experience, market demand for the product or service, collateral and equity injection. What other financing options can
be used in combination with the Agribusiness Guarantee? We encourage you to combine as many resources as possible to obtain the most cost-effective financing package for your project. Other sources that have been combined with the Agribusiness Guarantee include the U. S. Small Business Administration (SBA), Wisconsin Department of Commerce and county or local revolving loan fund financing.
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