Tuesday, March 3, 2015

Job Development Authority Loan Program

What is the Job Development Authority (JDA)?

  • JDA provides direct loans for the growth of manufacturing and other eligible businesses within New York State by assisting in financing a portion of the cost of acquiring and renovating existing buildings or constructing new buildings (“Real Estate” projects) or for purchasing machinery and equipment (“M&E” projects).
  • In most cases, JDA loans can lend up to 40% of the total project cost of Real Estate or M&E projects.
  • Loans can be made for up to 60% for those projects located in Empire Zones or economically distressed areas.

 JDA Financing Structure

  • The combination of a bank loan and a JDA loan allows up to 90% financing of a project.
  • Loans can be from $250,000 - $3,500,000.
  • JDA Real Estate Loan is normally a second mortgage loan, subordinate to a first-mortgage loan provided by a bank.
  • M&E Loans are secured by a first lien, co-equal with the bank’s lien, on the M&E being financed.
  • 50% Bank Loan.
  • 40% JDA Loan.
  • 10% Borrower Equity.

 Requirements

  • The Borrower must secure a letter of commitment from the bank detailing the banks portion of the project cost.
  • Personal guarantees are required from any person owning 20% or more of the Operating Company for whose benefit the JDA  Loan is being made.
  • The Borrower must provide at least 10% of the project cost as an equity contribution to the project.

What are the costs involved with utilizing JDA?

  • $250 Application fee.
  • JDA charges a 1% one-time fee to the borrower on the JDA portion of the loan as opposed to higher fees charged by similar programs.
  • In Real Estate Transactions, NYS Mortgage Recording Taxes are waived for the JDA portion of the loan amount.

Contact Jim Cunningham at 607-725-1225 for more information


See this and other newsletter articles at http://amt-mep.org/files/3014/2506/1381/2015-03.pdf

Visit our website at http://www.amt-mep.org
 

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