Grow Sacramento Fund

What is the Grow Sacramento Fund?

Grow Sacramento Fund (GSF) is a loan program for businesses in the City of Sacramento and Sacramento County. GSF is funded jointly by SMUD and the Sacramento Housing and Redevelopment Agency. GSF's purpose is to create or retain jobs and to assist energy-related businesses. All GSF's loans will be guaranteed through the Small Business Administration's 7(a) guarantee program.

Eligible Borrowers

Almost any for-profit business in Sacramento County can apply to GSF for funding--manufacturing companies, retailers, or service businesses. GSF looks for healthy, successful small businesses that need expansion capital to reach their full growth potential. The borrower must be able to show the ability ro repay the loan. all loans must be adequately collateralized. Personal guarantees of the owners normally are required.

Public Benefit

To qualify, the business must either create or retain jobs that are available to low- and moderate-income people or be involved in the energy business.

Longer Terms

Using repayment schedules up to 25 years (the maximum amount allowed by the SBA) gives the borrower lower payments and thus more cash to invest in the full potential of the business.

Larger Loan Size

GSF can make loans from $25,000 to $2,000,000.

Lower Down Payments

GSF allows higher loan to value ratios to preserve the business equity to maximize growth potential.

Lower Interest Rates

By enhancing community development, GSF is able to provide lower interest rates. Interest rates will be at market rate or below. The typical rate is prime plus 1.5 percent. The maximum rate is prime plus 2.75 percent. GSF's loans can be up to 25 years on real estate, 10 years on machinery and equipment, and 7 years on working capital.

Eligible Uses of Fund

Loan proceeds may be used for any legitimate business purpose, including the acquisition, construction, or rehabilitation of a building, leasehold improvements, machinery and equipment, and long-term working capital. GSF, however, does not offer lines of credit or provide venture capital and cannot fund R&D or satisfy equity needs.

Loan Fees

Fees will vary with the size of the loan will include an SBA guarantee fee, a packaging fee, and closing costs. All closing costs can be financed as part of the loan.