To qualify for a SEMCIC Loan, several conditions must be met.
Following is a list of the loan criteria that provides a basic outline regarding SEMCIC loans:
- Equity Injection is as follows: 5% for minority and micro loans, 10% for business expansions, and 20% for business start-ups.
- Ownership of the business must be at least 50-60% and owners must be at least a two-year resident of Mississippi, except for manufacturers.
- Funds may go toward the purchase or lease of land, building, equipment, inventory and working capital. Working capital should not exceed 1/3 the amount of the total loan or $50,000, whichever is less.
- Funds can be used for fixed assets, start-up costs, interest expense during construction, and professional fees. Minority and MS Small Business Assistance loans funds should not exceed a total loan of $250,000.
- Terms: SEMCIC will finance from 3 to 15 years depending on the use of funds. 1) Inventory - 3 years; 2) Working Capital - 5 to 7 years; 3) Equipment - 10 years; 4) Land and building - 15 years.
- Interest Rates: See the SEMCIC administrator for the latest prevailing interest rates.
- Project Limitations: For Minority loans, SEMCIC's contribution cannot exceed 25% of the project or $250,000, whichever is less, Micro loans are direct loans that are made in the amount not to exceed $35,000 and MS Small Business Assistance Program, formerly MBFC, SEMCIC's participation cannot exceed 50% of the project with a maximum limit of $250,000.
SEMCIC does not finance:
- Creditors who are inadequately secured
- Speculative land
- Existing debt
- The acquisition, improvement or operation of real property which is to be held primarily for sale or investment
- Closing costs - these must be paid for by the loan applicant and generally are 1% of the total loan amount