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Contract Line of Credit

Provides small, minority, women, and disabled-owned businesses a line of credit to fund contract-related working capital.

The Contract Line of Credit Loan provides support to small, minority, women, and disabled-owned businesses that need a line of credit to fund contract-related working capital. To qualify, contracts must be assignable to PIDC.

USES

Use of funds is restricted to labor, materials, and equipment costs directly associated with the contract being financed. Borrowers will be required to participate in PIDC-sponsored technical assistance programs designed to support their business growth. 


FINANCING

Financing is available to qualified businesses that have been awarded public or institutional contracts or sub-contracts.  Private sector contracts may also be considered for financing.

Line of Credit Amount Starting at $50,000-Financing will not exceed 90% of the dollar value of the contract(s) being financed.
Term May be renewed for additional one (1) year terms subject to PIDC approval.
Interest Rate

$249,999 and below:  2.75%
$250,000 - $499,999:  3.50%
$500,000 - $999,999:  5.00%

Underwriting Collateral requirements for the loan must include assignment of contract or sub-contract payments to PIDC. PIDC will review a combination of credit, cash flow, collateral, financial position, management capacity, and industry risk.


TIMING & PROCEDURE

Client submits a completed application to PIDC for staff review, at which time a thorough credit analysis is performed. For applications that receive a positive credit evaluation, the loan is presented to the PIDC Loan Committee and the Board of Directors. Following loan approval, PIDC issues a commitment letter to the applicant. Settlement of the loan may occur once the terms of the commitment are satisfied. The process from application submission to settlement generally takes approximately 60 to 90 days to complete.


FEES

Fees will vary with each transaction and generally include:

Application Fee $250 - $1000 depending on loan size - nonrefundable fee, payable at time of application submission.
Origination Fee 1.5% of the line of credit amount, payable upon acceptance of PIDC’s commitment letter.
Legal Fee Ranges from $500 to a maximum of $2,500, depending on loan size (does not include third party costs such as appraisals or UCC filings). Fees are subject to change. Please confirm all transaction fees with PIDC prior to application.


This program is supported in part by: