FAQs

1. Where does my business need to be located in order to qualify?

The business must be located in the State of Maryland to qualify. 50% of the investment funds must go to businesses located in designated Target Areas surrounding the various casinos. The other 50% of the investment funds can go to businesses located anywhere in Maryland.

 

2. How do you define a small business?

Small business is defined by Small Business Administration size standards SBA.gov. You will need your business NAICS Code to determine if your business qualifies as a small business.

 

3. How does the fund decide what the interest rate will be?

The interest rate will be based on the perceived risks of the transaction. The greater the risk of the loan; the
higher the interest rate. Refer to Debt Interest Rates to see the range of the interest rates.

 

4. Does the fund charge any fees in connection with getting a loan?

MCBIF requires an application fee of $100. If approved, a Commitment Fee of up to 1% with a maximum fee of $2,500. Loans of $25,000 or less will be charged a Commitment Fee of $100. All closing costs including the fees for loan document preparation by MCBIF’s legal counsel will be the responsibility of the borrower.

 

5. How long does the process take?

After receipt of a complete application package and all supplemental clarifications, loans of $150,000 or less will receive a decision within 15 days and if approved closings will typically range between 20 to 45 days from receipt of the signed commitment letter and commitment fee. If the loan is in excess of $150,000, it will receive a decision within 25 days and if approved closings will typically range between 20 to 45 days from receipt of the signed commitment letter and commitment fee.

 

6. If I got turned down by a bank, does that mean I will not qualify for a loan?

If you are turned down by banks or other lending institutions you may still qualify for a loan from MCBIF.

 

7. If I do not have collateral to pledge for a loan does that mean I will be turned down?

The lack of collateral will not disqualify you from applying for a MCBIF loan, but it will be a key factor in determining the approval, loan amount, interest rate and maturity.

 

8. Do you require a business plan?

A business plan is required for all MCBIF applicants.

 

9. What should be in a business plan?

A business plan generally should contain a detailed description of the product and/or service being provided, an industry outlook, a marketing plan, a description of the management team, personnel needs, and financial projections with assumptions.

 

10. Do you require life insurance on owners/guarantors?

Life insurance will be required on the key principals (if insurable) and in some cases key employees.

 

11. What is the minimum amount required as equity injection into a new business?

There is not a minimum requirement, but generally, an equity investment of 10% or greater of the total start up cost is expected in a new business from the owners

 

12. What is the minimum down payment required for an asset purchase (building, vehicles, and equipment)?

There is not a minimum requirement but generally, a down payment of 10% or greater is expected for an asset purchase.