FSC FIRST PROGRAMS

FSC First provides access to financing to small and minority businesses through 5 distinct loan products. The loans are a product of public-private partnerships between a consortium of participating banks, Prince George’s County, the State of Maryland and FSC First.

SBA 504 COMMERCIAL REAL ESTATE LOAN

This loan is ideal for more established business owners who desire to purchase owner-occupied commercial real estate. Interests in commercial real estate may include accommodations, warehouses, retail centers, office buildings, and venues for use by public and private entities. Loans are guaranteed by the U.S. Small Business Administration (SBA). 

  • Loans: Up to $5.5 million for healthy expanding businesses
  • Loan Term: 25 years for real estate, 10 years for machinery and equipment
  • Interest Rate: Fixed, below market financing

PROGRAM DETAILS

FSC First is a certified development company (CDC) designated by the U. S. Small Business Administration to market, process, close and service the SBA 504 Long Term Fixed Assets loans.  FSC First is authorized to serve as the CDC in any commercial real estate or equipment loan transaction in the State of Maryland.

The SBA 504 Long Term Fixed Assets (Commercial Real Estate and Equipment Loan Program) is available to the more established business owners who desire to purchase owner-occupied commercial real estate. This is generally used by a business to transition from a leased facility in order to consolidate operations, or to acquire equipment that can be used for at least 10 years. 

In its more than 40 year history as a CDC, FSC First has experienced that commercial real estate brokers, chief financial officers, commercial mortgage brokers and other market influencers like certified public accountants are ideal sources of referral for this program.

Parties to a typical SBA 504 loan structure are as follows:

  • A third-party or first-trust lender, such as a bank or mortgage company, can finance up to 50% of the eligible project costs
  • FSC First, as the preferred CDC, can finance up to 40% of the eligible project costs
  • The business is required to provide at least 10% in owner’s equity to finance the eligible project costs.

The business is able to obtain up to 90% financing for their expansion project; thus retaining more of its capital for their cash flow needs. The first trust lender (bank or mortgage company) will provide an independent commitment letter, subject to the business owner obtaining a second trust mortgage from FSC First (your preferred CDC).

From time to time, the typical 50/40/10 financing structure may need to be adjusted. For example, if the business owner is operating a start-up company (or has less than 3 years of profitable operating history) or limited use facility, the SBA requires at least an additional 5% in owner’s equity to support the transaction. The net effect is that the CDC portion reduces to 35% of the eligible project cost and the owner’s equity increases to 15%. This example is for illustrative purposes only.

  • Direct loans for healthy expanding businesses (the CDC portion of the project can be up to $5.5 million or 40% whichever is less)
  • Fixed rate — below market financing
  • Financing for fixed assets: commercial real estate acquisition, construction, machinery and equipment
  • Term — 20 years for real estate, 10 years for machinery and equipment with straight amortization (a major advantage compared to banking competitors)
  • Equity — Typically, a 10% cash down payment is required
  • Interest rates are negotiable

SMALL BUSINESS GROWTH FUND (SBGF)

The Small Business Growth Fund (SBGF) is a public-private revolving loan fund targeted towards smaller, established businesses (at least 3 – 5 years of operating history). This may be used towards smaller real estate acquisitions, leasehold improvements, equipment purchases, working capital expenditures, and inventory and human capital increases for the purpose of expanding established businesses.

  • Loans: $25,000 – $250,000 ($100,000 maximum for start-ups)
  • Loan Term: Up to 10 years
  • Interest Rate: Wall Street Journal Prime Rate plus up to 6%

PROGRAM DETAILS

The Small Business Growth Fund (SBGF) is available to established businesses with at least 3-5 years of profitable operating history.  This program is designed to assist emerging growth companies in response to access to new markets and expansion challenges.

This program is designed for qualified businesses seeking financing for general working capital, leasehold improvements, inventory, equipment (not rolling stock) purchases, and human capital increases for the purpose of expanding their already-established business.

The loan proceeds can be combined with and subordinated to traditional bank financing. FSC First will take a junior lien position on pledged assets to secure the loan. However, the repayment of the loan must be based upon the applicant’s demonstrated ability to generate sufficient cash flow to cover the debt service or loan repayment.

In addition, FSC First requires unlimited corporate guarantees as well as personal guarantees from all individuals who own 20% or greater ownership interest in the business seeking financing.

FSC First may require controlled disbursements of loan proceeds.  In other words, the loan proceeds will be disbursed through joint payee checks to the vendor and borrower.

Typically, in select circumstances, financing is provided to start-up businesses on a case-by-case basis.

  • Collateral: Business and Personal Assets
  • Personal Guarantees required
  • 10% cash down payment required for existing firms, and 20% cash required for start ups
  • Prince George’s County-based businesses ONLY

GREEN ENERGY LOAN PROGRAM

The Program was created to advance public and private investment in clean energy and other innovative green technologies in Prince George’s County. This fund is a Pepco/Exelon sponsored program that supports an emerging industry in the County with loans up to $250,000 for commercial building energy efficiency improvements, energy conservation & renewable energy measures.

  • Loans: Loan, guarantees or loan loss reserve up to $250,000
  • Loan Term: Not to exceed 20 years
  • Interest Rate: Dependent upon underwriting, typically not exceeding 6%

PROGRAM DETAILS

As part of the Prince George’s County Green Bank, FSC First will administer (originate, underwrite and service) the program to provide financing for building energy efficiency improvements, energy conservation and renewable energy measures.

Loan Size: Loan, guarantees or loan loss reserve up to $250,000

Loam Term: Not to exceed 20 years

Interest Rate: Dependent upon underwriting, typically not exceeding 6%

Application Fee: 1% of loan amount

Administration/Program Fees: 1.5% of allocation for software & servicing system licensing & set up

Loan Closing Fee: 1% of loan amount

On-going Servicing/Guaranty Fee: 20 bps on outstanding principal balance annually

Energy Audit or Feasibility Study Required?: Yes

Eligible Borrowers: Commercial and Industrial Building Owners [Established, credit-worthy organizations that have access to conventional financing, excepting government organizations, universities and community colleges are not eligible]. Borrower must demonstrate that credit was not available elsewhere.

Eligible Uses: Energy conservation, energy efficiency and clean Renewable energy measures including solar, fuel cells, geothermal, wind and waste-to-energy; enery efficiency & conservation measures including lighting, HVAC, building envelope, renovation or retrofitting of commercial property to reduce energy consumption including high efficiency lighting and building systems, heating ventilation air conditioning (HVAC) upgrades, high efficiency boilers & furnaces, high efficiency hot water heating systems, combustion & burner upgrades, fuel switching, heat recovery & steam traps, energy management and water conservation; clean transportation including electric vehicle charging stations and innovative approaches & technologies for the same.

Other Requirements: Borrower agrees to use best efforts to utilize Certified Local, Small and Minority Business Enterprise (LSMBE) participation goals and requirements and specific goals for the hiring of County residents, including annual reporting requirements to ensure compliance with applicable laws. Borrower agrees to use its best efforts to support the County’s interest in expanding procurement opportunities for contractors and vendors who are certified as one of the business enterprises as defined in Section 10A-101 et seq. of the Prince George’s County Code, with a goal to spend 35% with diverse supplierscontractors/vendors.

Economic Benefits: Offers multiple benefits to a broad range of stakeholders including building owners, municipalities, mortgage holders, lenders and energy efficiency/renewable energy contractors. Job creation. Improve properties, often reducing maintenance and repair costs. In addition, energy measures improve the efficiency, health and comfort of a building.

Sources of Project Leads: Banks/lenders, Contractors, NGO’s, Associations, EDA’s, Engineers, Architects

CITY OF BOWIE LOAN FUND

FSC First is the designated Fund Manager for the City of Bowie Revolving Loan Fund which provides businesses with assistance for costs associated with leasehold improvements, equipment purchases, working capital expenditures, and human capital increases for the purpose of expanding their already-established business.

  • Loans: Up to $50,000
  • Loan Term: 2 to 10 year maximum term
  • Interest Rate: Wall Street Journal Prime Rate plus up to 6%

PROGRAM DETAILS

The City of Bowie Revolving Loan Fund provides businesses with assistance for costs associated with leasehold improvements, equipment purchases, working capital expenditures, and human capital increases for the purpose of expanding their already-established Bowie-based business.

  • Collateral: Business and Personal Assets
  • Personal Guarantees required
  • Businesses located in Bowie ONLY
  • Loan ranges up to $50,000
  • Loan terms ranges 2-10 years max

ECONOMIC DEVELOPMENT INCENTIVE (EDI) FUND

FSC First is the designated Fund Manager for the Prince George’s County EDI Fund.  $50 million has been allocated to provide for the retention, expansion and attraction of businesses that will broaden the county’s commercial tax base, retain and attract jobs, support small and local enterprises, promote development and redevelopment opportunities, transit oriented development and the growth of key industry sectors. 

  • Loans: $250,000 minimum
  • Loan Term: 10 years maximum, amortization not to exceed 25 years
  • Interest Rate: 4% plus, depending on credit analysis

PROGRAM DETAILS

The Economic Development Incentive (EDI) Fund of Prince George’s County has dedicated $50 million to provide for the retention, expansion and attraction of businesses that will broaden the County’s commercial tax base, retain and attract jobs, support small and local enterprises, and promote development and redevelopment opportunities, transit oriented development and the growth of key industry sectors. The fund is administered by Prince George’s Financial Services Corporation (FSC First) and the Prince George’s County Economic Development Corporation (EDC). Projects should produce significant economic impact through measurable outcomes such as job creation and retention, increasing the commercial tax base, industry and commerce, and promoting local, minority and small business development. The project must demonstrate that this investment is leveraged with additional private and public dollars.

  • Eligible Uses: Land and building acquisitions, building construction and improvement, equipment acquisition, and working capital
  • Must create jobs and increase the commercial tax base – evaluation is conducted on a case by case basis by the EDC
  • Collateral: Business and Personal Assets
  • Personal Guarantees required
  • Projects located in the County’s developed tier, transit-oriented development areas, Transforming Neighborhoods Initiative areas and other focus areas will be given special priority
  • Prince George’s County ONLY

MICRO-ENTERPRISE LOAN PROGRAM (MD DHCD)

FSC First is a designated Fund Manager for the Maryland Department of Housing & Community Development (MD DHCD). Eligibility includes leasehold improvements, equipment purchases, working capital expenditures, and human capital increases for the purpose of expanding an established business and feasible start-up.

  • Loans: Ranging from $5,000 – $50,000
  • Loan Term: 2 to 5 year maximum term
  • Interest rate: Wall Street Journal Prime Rate plus up to 6%

PROGRAM DETAILS

The Micro-Enterprise Loan Fund – MD DHCD is designed to provide micro loans to businesses located in sustainable communities designated by the Maryland Department of Housing and Community Development. Eligible uses are leasehold improvements, equipment purchases, working capital expenditures, and human capital increases for the purpose of expanding their established business and feasible start-ups.

  • Collateral: Business and Personal Assets
  • Personal Guarantees required
  • Available to home-based businesses based on FSC First’s approval
  • Now available to businesses located in Priority Funding Areas (PFA’s) and Sustainable Communities Statewide

VIDEO LOTTERY TERMINAL FUND (VLT)

FSC First is a designated Fund Manager for the Video Lottery Terminal Fund (VLT), designated by the Maryland Department of Commerce, is designed to provide flexible funding solutions for small, minority, veteran, and woman-owned businesses.

COMMERCIAL PROPERTY ASSESSMENT FOR CLEAN ENERGY

FSC First is a designated Fund Manager for the Commercial Property Assessed Clean Energy (C-PACE) Program assists commercial property owners in accessing financing up to 20% of the appraised value to make qualifying energy efficiency and clean energy improvements to commercial properties with loans that are repaid through an annual surcharge on the owner’s property tax bill.

PROGRAM DETAILS

Energy conservation measures, including but  not limited to:

  • Solar energy equipment
  • Geothermal energy devices
  • Wind energy systems
  • Water conservation devices
  • Measures or systems or any construction renovation or retrofitting of commercial property to reduce energy consumption including high efficiency lighting and building systems, heating ventilation air conditioning (HVAC) upgrades, high efficiency boilers & furnaces, high efficiency hot water heating systems, combustion & burner upgrades, fuel switching, heat recovery & steam traps
  • Building shell or envelope improvements
  • Fenestration improvements
  • Building energy management systems and process equipment upgrades

STRIVE FOR 35 LOAN FUND

FSC First is a designated Fund Manager for the Washington Gas Strive for 35 Loan Fund.   This loan is geared towards diverse vendors who are interested in working in the natural gas industry and may have difficulty obtaining capital through traditional sources. The fund is  provided to assist minority-owned, women-owned and service-disabled veterans interested in serving the natural gas industry such as underground pipe and fitting, paving, engineering, hauling and removal, general construction, catering, staffing and employment agencies and other businesses whose services are needed by natural gas utilities.

  • Loan Amount: $10,000-$50,000
  • Loan Term: Up to 5 years (depending upon fund availability )
  • Interest: Up to 7%

PROGRAM DETAILS

The Strive for 35 Fund (SF 35 Fund) seeks to offer opportunities for diverse vendors who are interested in working in the natural gas industry and may have difficulty obtaining capital through traditional sources. Our objective is to offer a lending tool to Maryland certified diverse suppliers that may otherwise be facing difficulty in obtaining loans to finance operations. The Strive for 35 Loan Fund, supported by Washington Gas is provided to assist minority-owned, women-owned and service-disabled veterans interested in serving the natural gas industry such as underground pipe and fitting, paving, engineering, hauling and removal, general construction, catering, staffing and employment agencies and other businesses whose services are needed by natural gas utilities.

  • Personal Guaranty: Required
  • Prepayment Penalty: No
  • Application Fee: 1% of Loan Amount

MOUNT RAINIER MILLION DOLLAR INCENTIVE FUND

FSC First is a designated Fund Manager for the Mt. Rainier Million Dollar Incentive Fund which may be used for the purchase of real estate or expansion, machinery, equipment, furniture, fixtures, construction, leasehold improvements, inventory and working capital for business purposes. 

  • Loans: Up to $50,000
  • Loan Term: Shall be tailored to suit the projected cash flow with the intent to minimize the terms to fewer than 5 – 7 years in most cases. Generally, loans will be fully amortized however, balloon payments may be set on a case-by-case basis.
  • Interest Rate: Shall be determined by the application and all underwriting criteria.  

PROGRAM DETAILS

In order to be eligible for the City of Mount Rainier Million Dollar Incentive Fund (“MDIF”), the applicant seeking financing must meet the following requirements:

  1. Property/business must be located in the City of Mount Rainier.
  2. Property must be for commercial/business use. The property cannot be owned by the government.
  3. Applicant must be 100% legal owner of the property as recorded on title or lease holder. Applicant must have a City business license, be current on all license fees and taxes, and not have any outstanding City Code violations. Applicant must demonstrate that recent taxes, surcharges and charges on the property have been paid. 
  4. Applicant must establish that the business or property owner is able to repay the loan provided under the MDIF program or has the ability to comply with the terms of the incentive agreement.
  5. Applicant must be in good standing with the Maryland State Department of Assessments and Taxation.
  6. How to apply: Contact: Ronald A. Hopkins, City of Mount Rainier Economic Development Director at 240-462-3946 

CITY OF NEW CARROLLTON ECONOMIC DEVELOPMENT INCENTIVE REVOLVING LOAN FUND

FSC First is a designated Fund Manager for the City of New Carrollton Economic Development Incentive Revolving Loan Fund. These funds are used towards funding interior and/or exterior improvements to commercial buildings, reconstructing or remodeling existing buildings, constructing new commercial buildings, furniture, fixtures and equipment purchases, inventory and working capital.

PROGRAM DETAILS

The City of New Carrollton Economic Development Incentive Revolving Loan Fund serves to help prospective business owners to expand and reinvest in the community. It is beneficial to attract businesses to the City of New Carrollton that will enhance the City’s commercial tax base and create jobs by establishing a revolving loan fund to encourage and nurture commercial revitalization. The loan funds will be used for funding interior and/or exterior improvements to commercial buildings, reconstructing or remodeling existing buildings, constructing new commercial buildings, furniture, fixtures and equipment purchases, inventory and working capital.  In addition, loan funds may be used as an incentive for the annexation of commercial property into the corporate limits of the city provided that the property owner seeking to annex property into the city has met the other requirements of the Loan Fund program. Note: Funds may not be distributed until the annexation is complete. Loan amount, terms and rates are contingent upon the project scope and determined during underwriting.

EDI FUND CONTRACTORS ADVANTAGE PROGRAM (CAP)

FSC First is a designated Fund Manager for the EDI Fund Contractors Advantage Program (CAP) utilizes $1 million of EDI Funds to support County-based contractors seeking lines of credit to finance working capital, equipment, labor and materials.

  • Loans: $250,000 maximum
  • Loan Term: 10 years max; amortization not to exceed 25 years
  • Interest Rate: to be determined by the underwriting bank

PROGRAM DETAILS

Businesses assure priority assistance  for Local Small Minority Business Enterprises (LSMBEs) and support local hiring. The bank financing the line of credit must be on the  County’s pre-approved list to participate in the program. Requirements are as follows: 

  • Collateral to be determined by the Bank
  • Interest rate to be determined by the underwriting bank
  • Loan Term of 10 years max; amortization not to exceed 25 years
  • Maximum line of credit: $250,000
  • Maximum 24 month loan term
  • Maximum 25% Guarantee (not to exceed $62,500) to be provided by FSC First (CAP)
  • Personal Guaranties required
  • Preference for Local Small Minority Business Enterprises (LSMBEs) requiring assistance for Prince George’s County-based projects only
  • Fee: 1% of guaranteed portion of loan 

SUBSCRIBE TO THE FSC FIRST EMAIL NEWSLETTER

Join our mailing list to receive the latest news and important updates from the FSC First team.

You have Successfully Subscribed!