The Muncie-Delaware County Microloan Program (MLP) is administered by the Muncie-Delaware County Indiana Economic Development Alliance in close cooperation with the Muncie-Delaware County Chamber of Commerce. It is a component of the economic development effort known as Vision 2016.

Eligibility:

Applicants with a comprehensive business plan can apply for funding from the original program where funds were obtained through a loan from the Indiana Small Business Development Corporation and a grant from the former Muncie Urban Enterprise Association. Funding is also available from a new program within the MLP financed by a grant from the Indiana Economic Development Council. This program is targeted toward minority- and women-owned businesses.

Eligible Loan Activities:

Acquisition of fixed assets, such as land, buildings, equipment and working capital will be considered eligible for loan activity. Fixed assets can include renovation or construction of buildings, modernization of plant and equipment to allow for better competition and increase growth and site preparation. All types of businesses are eligible for MLP funding where there is an opportunity to create and retain positive employment opportunities for start-up, expansion or retention projects and there is a reasonably good chance that the loan can be repaid.

Ineligible Loan Activities:

Land banking or the construction of speculative buildings will not be funded. Depending upon the circumstances, loans which assist a company or individual in moving into the Muncie-Delaware County area from another labor area may not be funded. If for any reason, a loan recipient relocates the business outside the Muncie-Delaware County area during the term of the loan, the loan is immediately callable and due. Loans for investing in high-interest accounts, certificates of deposits, or other investments that do not result in the direct creation or retention of employment opportunities will not be funded. Loans that are to be used for the direct repayment of existing debt, prior to receiving the loan will not be funded. Loans that would involve a “conflict of interest” for any officer or employee of the Microloan Board or staff will not be funded.

Financing Policies:

Loans of up to $25,000 will be made to a single borrower ($10,000 for minority- or women-owned businesses utilizing the new program). A new business start-up must have a minimum of 20 percent cash investment into the project to be eligible to apply and use the MLP. All loans will be made with fixed interest rates which will be determined on a case-by-case basis by the loan administration board. Ideally, working capital loans are to be repaid within three years and fixed asset loans within five years. Payments on an amortization schedule of principal and accrued interest will be paid on a monthly basis typically beginning one month after the loan is closed unless an alternative arrangement is approved. Because MLP financing is designed to assist firms with special credit problems, special financing techniques may be required to meet credit needs of borrowers.

Limitations:

Proceeds of the MLP program cannot be used in conjunction with another loan program to finance a project and cannot be used for programs operated by cable television systems.

Process:

Applicants are encouraged to make contact with the Microloan Program Administrator to determine eligibility. Application and instructions are provided and there is a one-time processing fee of $100.00 per application. When returned, the application information will be provided to the Microloan Board for preliminary review to determine interest and eligibility of the proposed loan. After preliminary review, a Microloan Program Board meeting is set. Certain additional costs may also be assessed at the time loans are closed to recover any additional fees such as legal, filing, recording, title work, etc.

Contact:

Dan Ridenour, Mayor
Muncie-Delaware County Microloan Program
300 N High St.  Muncie, IN 47305
765-747-4845
mayor@cityofmuncie.com

Additional Resources:

East Central Indiana Small Business Development Center
Peggy Cenova, Director
(765) 282-9950
pcenova@isbdc.org

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