Companion loans of up to $5 million with 4% fixed interest rates are available through the DHCD small business companion loans program. Companion loans are subject to the
US Treasury’s State Small Business Credit Initiative (SSBCI) policies.
The goal of these loans is to enable access to capital for small businesses that may not otherwise be able to obtain conventional lending. This program accomplishes this by lending for up to 50% of the total project costs, up to $20 million. Senior, pari passu, and subordinate lien positions are available, subject to underwriting and community impact assessment.
If you are interested but need assistance in obtaining a companion loan, our business development team offers to identify a potential lender from our small business lending resource network for applications that are otherwise eligible. To learn more, please
schedule an initial consultation for a meeting with our business development team.
Eligible Uses of Funds
- Property acquisition, rehabilitation, or construction (owner occupancy requirements apply)
- Equipment purchases
- Working capital/ operating loans
- Tenant improvements (Tenant must be borrower)
- Employee Stock Ownership Plan (ESOP) transactions
Eligibility Criteria
The following are eligibility requirements for an Own Your Future loan:
- Requested amount must be between $250,000 and $5 million
- Total project costs cannot exceed $20 million
- Borrowers must obtain a minimum 1:1 private capital match (For every dollar of the DHCD loan, you must provide at least one dollar from a private source)
- If you need assistance in obtaining a matching loan, DHCD offers to identify a potential lender from our small business lending resource network for applications that are otherwise eligible.
- Personal guarantees are required from all owners with more than 20% equity
Occupancy Requirements (For Real Estate Transactions)
The US Treasury has established policies regarding eligible uses of funds for real estate acquisition, construction, and renovation which favors facilities that will be 100% owner-occupied. However, the following are allowable uses:
-
Acquisition or Renovation: Borrower must occupy at least 51% of square footage upon acquisition/completion.
-
New Construction: Borrower must occult at least 60% of square footage upon acquisition/completion.
-
For projects with total costs of $500,000 or less: Owner occupancy requirements do not apply to matched loans of $250,000 available for acquisition or construction. Please contact the program to learn more about this exception.
Note: Proceeds cannot be used to renovate space intended to be leased to another business. Residential construction is not an eligible use. If you are unsure whether your project is eligible, please complete a Business Consultation form and a member of our team will assist.
Loan Terms
Loan terms are flexible and focus on maximizing community benefit. They include:
- 4% fixed interest rates
- Up to 30 years terms
- Senior or subordinate loan positions available
Eligible Business
Your business must meet these criteria:
- Fewer than 500 employees (including those employed by subsidiaries)
- Commercial uses
- Your business cannot be:
- Adult entertainment facilities
- Check cashing facilities
- Gambling facilities
- Gun shops
- Liquor stores
- Massage parlors
- Pawn shops
- Tanning salons
- Tattoo parlors
- Cannabis businesses
Application
Apply online using the application portal.
For more information:
