Loan Programs
California Coastal Rural Development Corporation (Cal Coastal), a nonprofit corporation operates much like a commercial lender. We have the ability to provide direct loans and guarantee bank loans. We currently operate seven loan programs to provide financing for businesses and farms located in our lending foot print. On many of our programs we can operate statewide. Our loan programs can be used to purchase or refinance commercial real estate or farm land, machinery, equipment, inventory or working capital. These loan products allow businesses/farmers to get the boost they need to expand and grow into successful enterprises that help to strengthen the economy and create new jobs.
Since 1982, Cal Coastal has been instrumental in providing loans to thousands of small businesses throughout California. Cal Coastal offers a variety of loan programs to support small businesses including:
SBA 504 Loan Program
This loan program allows Cal Coastal to partner with a commercial bank to provide up to a 90% loan for major asset purchases or for owner-occupied commercial property. The program calls for the partner bank to provide a 50% loan. The Cal Coastal SBA 504 loan would then provides 40% of the needed financing which allows the borrower to inject a minimum of 10% into the project. The interest rate is tied to U.S. treasury rates and can be fixed for up to 25-years.
Direct Farm Loans
In this loan program, Cal Coastal provides loans to family farms eligible for a Farm Service Agency guarantee. Loan proceeds may be used for crop production, harvest, farm ownership, farm improvements or equipment acquisition. Loans may be up to $2,236,000. Operating loans cover crop cycles. Farm ownership loans may have a maximum term of 30 years. Interest rate is based on the Cost of Funds Index (COFI).
Microloan Program
Cal Coastal provides credit and technical assistance to new or expanding small businesses. Loan proceeds may be used for inventory, machinery, equipment, leasehold improvements and remodeling expenses as well as permanent working capital. Loans range between $5,000 and $50,000. Interest rate is fixed at prime plus 4.00% with a current maximum interest rate of 7.75%.
Intermediary Relending Program
Designed to promote small business enterprises. Loans to businesses that will hire or retain employees in rural areas. Business must be located in an unincorporated area or in a city or town with a population of 50,000 or less. Loans may be used for equipment acquisition, plant improvements and inventory and working capital. Loan size ranges from $25,000 – $250,000. Maximum term of seven years for equipment or working capital; longer terms for other uses. Interest rate is at variable prime rate plus 3.50% with the floor of 7.00%. Loan fees are 2.5% of the loan amount.
Monterey County Revolving Loan Fund
This loan program is for businesses located in Monterey County. The loan must meet employment criteria of one job created or saved for each $20,000 lent. Loan proceeds may be used for inventory, furniture and fixtures, leasehold improvements, equipment, working capital or business acquisition. Loans range between $5,000 to $400,000. Rate tied to prime based on credit evaluation. $200 non-refundable application fee and 2.00% of loan amount due at time of funding, plus closing costs.
Loan Guarantee Program
To promote small business enterprises with special emphasis on assistance to those which will create or retain jobs in California. A commercial bank will provide the funds. Cal Coastal with the State of California guarantees up to 80% of the loan to a maximum guarantee of $5,000,000. Loans may be used for inventory, accounts receivable, equipment acquisitions, farm production and working capital (e.g. Revolving lines of credit, short and intermediate term loans). Maximum term is seven years. Interest rate determined by Lender. Cal Coastal charges a 2.50% guarantee fee and a $250 documentation fee. Guarantees of over $2,500,000 have a reduced guarantee fee of 2.25%.
Community Advantage – 7(a) Loan Program
Initially established as a pilot program by the SBA this now permanent program provides financing to borrowers unable to qualify for the traditional 7(a) loan program. Although a borrower must prove credit worthiness and the viability of the business idea; unlike traditional lending, qualification for this program is not limited by the size of the borrower’s balance sheet or the amount of collateral involved. Management and technical assistance is provided to ensure that your business can start, grow and achieve long-term success. Providing affordable credit for businesses that might not qualify for traditional financing Community Advantage can provide an alternate path to help build your business. The maximum loan amount is $350,000. Fees are based on term and the loan amount.
