108 Loan Programs For Atlantic City and Portions of Atlantic County
The HUD Section 108 Loan Program is for existing for-profit businesses. (Non-profits are ineligible.) The program is intended to create jobs, revitalize communities, and increase the tax base.
Loans may be made for up to $400,000, or 40% of the project cost, whichever is lower. The HUD Section 108 Loan Program is intended to be combined with funds from the U.S. Small Business Administrations’ 504 Program, or funds from the Federal Home Loan Bank through its member institutions and other conventional bank lenders.
A borrower of the HUD Section 108 Loan Program must create one (1) full-time equivalent job for every $35,000 borrowed. The loan must be made to businesses located in census tracts with poverty rates of 30% or higher, or documentation must be provided that 51% of all jobs created are low-and-moderate income persons.
Loan monies are available for a variety of business functions, as listed below:
Funds cannot be used to reimburse for costs incurred prior to the Atlantic County Improvement Authority (ACIA) completing a HUD Environmental Review, except for planning costs of the project.
Independent credit investigations are conducted on the applicant, and the principal owners and investors. A non-refundable fee of $250 is payable at the time an application is submitted. The applicant will pay 3% of the total HUD Section 108 Loan amount due at the time of closing. The applicant will be responsible for all other fees, including bank, SBA, and institutional lender fees, appraisal and environmental fees, legal fees from outside firms, and the ACIA attorney’s office, and any other fees. Applicants will receive a Good-Faith Estimate of the projected ACIA fees, which may or may not be adjusted at closing.
All proposed projects are subject to an Environmental Review. All funded projects are required to comply with federal, state and local statutes, regulations and requirements including, but not limited to, the Davis-Bacon Act, Workers Compensation, Section 3 of the Housing and Community Development Act, and insurance requirements.
The Section 108 Program should not provide funds to replace traditional conventional financing, or the use of the personal resources of the borrower and his family members and supporters. Borrowers should clearly demonstrate that they have the skill sets necessary to make the business a success. In those instances in which this is clearly not demonstrated, arrangements for technical assistance must be made available and used prior to the issuance of a loan. Ongoing technical assistance may also be needed, and the willingness of a borrower to accept such assistance is also crucial.
Disclaimer: Businesses involved in gambling, pornography, illicit activities, or affiliated with such activities, are prohibited from applying for the program.
Kevin Burns, Loan Specialist