Frequently Asked Questions for Businesses: Eligible Uses of Loan Proceeds
Other Business Questions
General
Eligible Businesses
Procedures
What are the eligible uses of loan
funds? 
Loan proceeds can be used for the purchase or improvement of land, buildings,
machinery and equipment; purchase of inventory; closing
fees; permanent working capital, revolving lines of credit, soft costs
and refinancing existing debt, WHEDA closing fee (this portion will not be guaranteed).
Will a project involving real estate
qualify if the borrower leases a portion of the space to a tenant?
Yes, under the mixed-use category, as long as your business occupies
at least 25% of the total square footage of the building, it
qualifies. A mixed-use property can be a combination of commercial and
residential space or totally commercial where some of the space is leased
to one or more businesses.
Is there a limit to the amount of
loan proceeds that can be used in the part of a mixed-use property not
occupied by the borrower's business?
Yes. The majority of the proceeds from the guaranteed loan should benefit
the borrower's business. Some of the proceeds may, however, be used to
make improvements to the remaining part of the property.
Can WHEDA guarantee a new loan
to refinance existing debt?
Yes, refinancing existing debt that is accompanied by
a business expansion is an eligible use of proceeds. The portion of the loan to be used for refinancing cannot exceed 75% of the WHEDA guaranteed loan.
Can the WHEDA Small Business Guarantee
be used to finance an in-Home business (i.e., computer consultation, desktop
publishing or day care)?
Yes, however if you wish to finance the purchase or improvement of land
and buildings, the business must utilize at least 25% of the total property.
There are no restrictions on the percentage of the property used for
business purposes if you want to finance assets other than real estate.
|
