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THE CITY OF SANDUSKY

222 Meigs Street
Sandusky, OH 44870
419.627.5844 (Phone)
419.627.5825 (Fax)

The City Building is open from 8:00am to 5:00pm Monday through Friday.

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DEPARTMENT OF PLANNING,
ENGINEERING & DEVELOPMENT

Economic Development Services

MICROENTERPRISE LOAN PROGRAM

OVERVIEW OF THE SANDUSKY MICROENTERPRISE LOAN PROGRAM

The City of Sandusky Microenterprise Loan Program is designed to provide access to capital for persons of low-to-moderate income who may not be able to secure traditional financing to start or expand a small business.

A microenterprise is defined as a business that hires five or fewer employees, one or more of whom owns the business.

PROGRAM GUIDELINES

Maximum household incomes of the applicants of a Microenterprise Loan cannot exceed moderate-income limits, i.e. 80 % of the Sandusky Metropolitan Statistical Area median income adjusted for household size and as established annually by the U.S. Department of Housing & Urban Development [Disclaimer]. Household income is based on all wage earners age 18+. 

Household Size*

1

2

3

4

5

6

Maximum Income of all Microenterprise Owners

$33,700

$38,500

$43,350

$48,150

$52,000

$55,850

*For Households greater than six (6) persons, contact the Department of Development at 419.627.5873.

  • Microenterprises must be located within the City of Sandusky, and must commit to maintain their place of business within the City during the term of the loan.  
  • All applicants must provide a credit denial letter or bank letter specifying the maximum amount of bank participation in the project in order to document the need for funds. 
  • Microenterprises must be engaged in a lawful business and must obtain all required permits and licenses prior to closing on the loan. Requirement information can be found at the Ohio Department of Development.
  • Owners of service or retail/wholesale sale businesses that meet program requirements may apply.  Owners of home-based businesses within the City are eligible.
  • The minimum loan amount is $1,000 and the maximum loan amount is $7,500.  
  • The maximum loan term is four years. 
  • Loans may be made for purchase or lease of machinery, tools or equipment, non-perishable inventory, and working capital. 
  • Loans will not be made for:

    wages and salaries
    purchase of real property
    renovation of real property

  • Loans will not be made to refinance existing debt or to pay back taxes or fees.  
  • Loans will not be made if there are collection liens, judgments or unresolved bankruptcy and delinquent taxes. 

TO PARTICIPATE IN THE PROGRAM

STEP 1

A start-up business must attend the “Start-Up Business Basics” course through the Small Business Develoment Center (SBDC). Contact William D. Auxter, CBA Coordinator at 800.826.2431 Ext. 210 for the latest schedule of class times and locations.

STEP 2

A business plan must be developed and/or reviewed by the SBDC located at Terra Community College.  These services are offered free of charge by the SBDC to assist existing and startup businesses in preparing or refining a business plan. Contact William D. Auxter, see Step 1.

STEP 3

Those meeting the above requirements may then start the process of applying for a microloan by registering in person at the City of Sandusky’s Department of Community Development, 2nd floor, 222 Meigs Street, Sandusky, Ohio 44870. Phone 419.627.5873.  

  • Register expressing interest in the program and pay a non-refundable registration fee of $25.  This fee will be applied to a credit report.
  • Provide verification of income (the entire household income of each Microenterprise owner is required).
  • Provide copies of individual tax returns for the two prior years and all W-2’s and related documents.
  • Sign an authorization allowing the City to request a credit report and other verifications of documents as necessary.  
STEP 4

To apply for a loan:

  • Submit the loan application package to the Department of Community  Development.
  • Existing businesses submit a balance sheet and income statement for the last two years.
  • All applicants must provide a credit denial letter or bank letter specifying the maximum amount of bank participation in the project in order to document the need for funds. 
STEP 5

The Loan Review Committee will review the application and business plan.  The Committee may approve or deny the request as presented or may recommend changes to the request or defer action until additional information is provided.  The Committee’s decision on a loan will be final and cannot be appealed.  However, an applicant may re-apply once all factors contributing to the Committee’s decline of the application have been resolved.

LOAN TERMS

All loans have a 0% interest rate for the term of the loan. Repayment of principal will begin after at least 30 days following the closing on the 1st of the month.   The number of payments (term) may be negotiated but will not exceed 48 months.

LOAN REVIEW CRITERIA

Loan applications will be judged according to the following criteria:  

  • Does the business plan identify a product or service that will have long-term acceptance in this marketplace?     
  • Are the pro forma projections of business income and expenses realistic and is there a contingency plan for repayment of the loan in case the market does not produce sales as projected?  
  • Does the staff of the business have the capacity to be successful by work experience and or training in the field of business? 
  • Have the owners/borrowers demonstrated a commitment to the business in their equity contribution and by business or personal assets pledged as collateral for the loan? 
  • Is the applicant an acceptable credit risk?
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