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KSBDC Louisville Funding Sources for Business

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in today’s business environment entrepreneurs need comprehensive and up-to-date information about finance and funding. Whether financing an innovative start-up or growing a mature business, sources of …

in today’s business environment entrepreneurs need comprehensive and up-to-date information about finance and funding. Whether financing an innovative start-up or growing a mature business, sources of funding are not always easy to find. While the most common source of funding is a loan from a bank, many start-up’s cannot provide the security needed to borrow in today’s tight credit environment and need to find alternative sources such as special loan programs, crowdfunding, grants and business investors.

Any business needing additional funding will usually find that they need to assemble any number of financing pieces almost as if they are assembling a puzzle. that is why we are launching this revised edition of sources of funding to assist business leaders and entrepreneurs in finding the funding sources available to both start-ups and mature businesses.

We’ve included private equity, state and local grants, incentives as well as conventional debt financing.
We hope this publication will help business owners and entrepreneurs like you continue to create jobs and drive our economy forward.

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  • 1. P i e c i n g t o g e t h e r a F u n d i n g s t r at e g y $ $ $ $ Money Sources Directory
  • 2. 2 KSBDC Mone y Sources Directory
  • 3. INTRODUCTION In today’s business environment entrepreneurs need comprehensive and up-to-date information about finance and funding. Whether financing an innovative start-up or growing a mature business, sources of funding are not always easy to find. While the most common source of funding is a loan from a bank, many start-up’s cannot provide the security needed to borrow in today’s tight credit environment and need to find alternative sources such as special loan programs, crowdfunding, grants and business investors. Any business needing additional funding will usually find that they need to KSBDC helps you find alternative funding sources such as assemble any number of financing pieces almost as if they are assembling a special loan programs, puzzle. That is why we are launching this revised edition of sources of funding to crowdfunding, grants and assist business leaders and entrepreneurs in finding the funding sources available business angels to both start-ups and mature businesses. We’ve included private equity, state and local grants, incentives as well as conventional debt financing. We hope this publication will help business owners and entrepreneurs like you continue to create jobs and drive our economy forward. David Oetken, MBA Center Director Louisville Small Business Development Center 502-625-0123 SBDCInfo@UKy.edu KSBDC.org/Louisville KSBDC Mone y Sources Directory 3
  • 4. TA B L E O F CONTENTS – M o n e y S o u r c e s About KSBDC KSBDC Leadership 6 8 Federal Government 9 Small Business Administration 7(a) Loan Program International Trade Loans Export Working Capital Program CAPLines Program LowDoc Loans SBAExpress SBAExportXpress Patriot Express 504 Loan Program Small Business Investment Company (SBIC) MicroLoan Program Pre-Qualified Loan Program 9 9 9 9 9 9 9 12 13 14 15 15 16 US Dept of Housing and Urban Development Community Development Block Grant Loans (Section 108 Program) 16 16 US Dept of Agriculture Business and Industrial Guaranteed Loans Business and Industrial Direct Loans Guaranteed Farm Ownership/Operation Loans Direct Farm Ownership and Operating Loans 16 16 16 16 16 Export-Import Bank of the United States Working Capital Loan Guarantee Program 17 17 4 KSBDC Mone y Sources Directory Small Business Innovation Research Program 17 State Government 18 Kentucky Economic Development Cabinet Kentucky Economic Development Finance Authority Direct Loan Program Industrial Revenue Bond Financing Small Business Credit Initiatives 18 18 18 18 18 Incentive Programs Kentucky Rural Economic Development Act (KREDA) Kentucky Jobs Development Act (KJDA) Kentucky Industrial Development Act (KIDA) Kentucky Economic Opportunity Zone Program (KEOZ) Kentucky Investment Fund Act (KIFA) Linked Deposit Loan Program 19 19 19 19 19 19 20 Office of the New Economy Innovation and Commercialization Centers Rural Innovation Fund Research and Development Fund Kentucky Commercialization Fund 20 20 21 21 21 Local Government 22 Area Development Districts TVA Loans: Southwestern Kentucky Rural Electrification Loans (REA) Mountain Association for Community Economic Development (MACED) 22 23 23 24
  • 5. TA B L E O F CONTENTS – M o n e y S o u r c e s Private Capital 24 Angels 27 Alliance Group Blue Equity Evermore Investments, LLC Futurity Investment Group Pattco Ventures Yearling Fund Anchorage Angels 24 24 24 24 24 24 24 Enterprise Angels Innovation Angels Louisville Angel Investor Network Bluegrass Angels & Bluegrass Angel Venture Funds Queen City Angels 27 27 27 27 27 Crowdfunding 27 Kickstarter.com Indiegogo.com Rockethub.com 27 27 27 Mezzanine Financing 28 Non-Profit Organizations 29 Kentucky Highlands Investment Corp Human/Economic Appalachian Development METCO Community Services & Revitalization Microenterprise Loan Program Southern Kentucky Economic Development Corporation 29 29 29 30 Venture Capital 25 Chrysalis Ventures LLC Mountain Ventures Inc Venture Connectors Village Ventures Inc Office for the New Economy Draper Triangle Ventures Heron Capital Allos Ventures River Cities Capital Funds Triathlon Medical Ventures UPS Strategic Enterprise Fund 25 25 25 25 25 25 25 25 25 25 25 Seed Funds 26 Commonwealth Seed Capital Kentucky Seed Capital Fund Cardinal Venture Fund Vogt Awards Venture Connectors 26 26 26 26 26 KSBDC Mone y Sources Directory 30 5
  • 6. A B OUT K S B DC Kentucky Small Business Development Center (KSBDC) is a network of regional centers throughout the Commonwealth dedicated to growing and improving Kentucky’s small business community. Our mission is to strengthen Kentucky businesses and create economic growth by providing excellent management assistance, educational programs and helpful resources for Kentucky’s small business owners and entrepreneurs. KSBDC The Louisville SBDC is a partnership between institutions of higher education, economic development provides one-on-one organizations and the U.S. Small Business Administration. We serve the Counties of: Bullitt, Carroll, Henry, Jefferson, Oldham, Owen, Shelby, Spencer and Trimble. consultations at no cost to existing and potential Planning KSBDC provides valuable tools to help entrepreneurs make informed business decisions entrepreneurs in the when planning to open a new business, purchase an existing business or expand an Louisville region. established business. Each KSBDC service center has access to: • Market Research • Demographics • Industry Profiles • Business Books • Sample Marketing Plans BlueMoon Winery Grows From Kentucky Vineyard After eight years growing grapes on her farm in Marion County, Alex Ackermann decided to expand her business and open the first winery in the county. KSBDC was there. Read more success stories at http://ksbdc.org/category/success-stories/ 6 KSBDC Mone y Sources Directory
  • 7. A B OUT K S B DC Consulting for Louisville Area Businesses KSBDC offers free one-on-one consulting services. All of our management consultants have broad-based skills and significant experience as business owners and/or managers. Our consultants are qualified to answer questions and address a variety of topics, including: • Comprehensive Business Planning • Cash Flow Projections • Market Planning and Research • Organizational Structure • Staffing Needs The Louisville SBDC • Record Keeping meets the educational • Human Resource Issues needs of the local small • Cash Flow Management • Financial Analysis business community by • Customer Retention Strategies offering a variety of low • Certification for Minorities & Women • Technology Commercialization Training cost training programs taught by industry experts KSBDC offers affordable training workshops designed to provide early stage and and qualified SBDC existing business owners with the knowledge required to maintain and expand Consultants. a successful business. A listing of training workshops currently being offered throughout the KSBDC network is available by visiting www.ksbdc.org. Numerous self-paced on-line training courses are also accessible on our Web site. Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of SBA. Disability accomodations should be requested by contacting your local SBDC. KSBDC Mone y Sources Directory 7
  • 8. K S B DC L EADERSHI P David Oetken Toni Sears Director, Louisville SBDC Dave Oetken has worked with the KSBDC for since 2011. Dave began his business career in the sports/entertainment industry, primarily in ice skating and ice hockey. He has owned and managed three ice rinks and was named the Manager of the Year award from the Ice Skating Institute of America. Dave was operations manager for several professional ice hockey teams in both the East Coast Hockey League and the American Hockey League. He has owned, operated and sold several businesses in the food industry. He moved into the restaurant field, owning and operating a number of franchise concepts. Since 2005 he has owned Louisville News company, one of the largest distributors of thoroughbred horse publications in the eastern United States. David has a B.A. and M.B.A. from Bellarmine University. He remains active in his community, serving as a SCORE volunteer since 2003 and is a past vice chair for GLI’s Small Business Innovation Committee. Assistant Director, Louisville SBDC Toni Cardell has worked with the Louisville SBDC for five years. Prior to joining the KSBDC, she served as project director for the Louisville Minority Business Development Center and housing director for Sullivan University. Toni holds and M.B.A. and a B.A. in English, both from the University of Louisville. She is a twice recipient of the Million Dollar Loan Club, a distinction honoring KSBDC consultants who have secured more than $1 million in loans. Toni volunteers with Middle School Connection and Big Brothers Big Sisters of Kentuckiana. When not at work, Toni enjoys reading, volunteering, exercising and attending plays and sporting events. 502-625-0123 david.oetken@uky.edu 8 502-625-0126 Vallorie.Henderson@uky.edu 502-625-0124 toni.cardell@uky.edu Janet Flaugh Vallorie Henderson Assistant Director, Management Consultant Vallorie Henderson began working with the Kentucky SBDC in August of 2011. Prior to joining the team in Louisville, Vallorie served as the business development director for the Kentucky Arts Council in Frankfort for 10.5 years. She holds a B.A. from Berea College KSBDC Mone y Sources Directory in Berea, Kentucky and a M.F.A. from Miami University in Oxford, Ohio. Vallorie has over 25 years of experience in marketing and promotion with such regional organizations as the Speed Art Museum and the Indianapolis Children’s Museum. She owns and actively markets her own fiber arts studio on both a national and international level. Vallorie’s own success in marketing and selling her artwork allows her to relate to individual business owners on a very personal level. Assisting small business owners in understanding how to grow their revenue streams is high on Vallorie’s list of priorities. She also serves on the Board of Directors for Just Creations, a fair trade retail outlet in Louisville. She has traveled internationally to work with artisan entrepreneurs in growing their businesses and to assure they are paid a living wage. Communication Coordinator, Louisville SBDC Janet Flaugh has worked with the Louisville SBDC for five years. Before joining the KSBDC she served as director of volunteer services for the Kentucky Center for the Arts. Janet has a B.A. in Psychology from Indiana University. She is active in her community, serving as a volunteer for the Floyd County Animal Rescue League. When not at work, Janet enjoys camping, hiking, kayaking/rafting and nature photography. 502-625-0123 janet.flaugh@uky.edu
  • 9. Federal Government Money Sources Federal Government Money Sources US Small Business Administration US SBA: 7(a) Loan Guarantee The most basic and most frequently used SBA program is the 7(a) Loan Guarantee. There are three essential parties to an SBAguaranteed loan; SBA, the borrower, and the lender (usually a bank). Small business owners and entrepreneurs interested in an SBA guarantee must submit a loan application to the lender institution. If the lender finds the applicant needs additional support, it forwards the application to the nearest SBA office for credit analysis. If approved by the SBA, the lender then closes the loan and disburses the proceeds. Qualification as a small business is based on the average number of employees for the preceding 12 months or on sales volume averages over a three-year period. In addition, borrowers must demonstrate the ability to repay and be willing to pledge sufficient assets to secure the loan. New businesses may be required to put up onethird or even one-half of the total assets needed to get started. Finally, the business must be unable to obtain financing on reasonable terms without the guarantee. Loans under this program may be guaranteed up to 85 percent. However, the maximum guarantee on loans exceeding $150,000 is 75 percent. The maximum amount SBA can guarantee for any one borrower is $3,750,000. Interest rates on the guaranteed loan program are negotiated between the lender and the borrower and are subject to SBA maximums. Generally, the interest rate is 2.25-4.75 percent over the Prime Interest Rate, depending on loan amount and maturity of the loan. Maximum maturity is 25 years to finance the purchase of fixed assets. Most small businesses who borrow working capital can expect a maturity of five to ten years. Borrowers may use the proceeds from a 7(a) loan for expansion, renovation, construction, or purchase of land or buildings, to purchase machinery, equipment, fixtures, to augment working capital and to refinance existing debt under special conditions. Special purpose loan programs under the SBA Guarantee: International Trade Loans SBA provides guarantees to businesses that are engaged in international trade, preparing to engage in international trade, or can show that they are suffering from direct import competition. The SBA can guarantee up to 90% of $5 million in combined working-capital and fixed-asset loans. None of the loan proceeds can be used for debt refinancing. Financing fees and interest rates are similar to the 7(a) Guarantee program schedule. Export Working Capital Exporters seeking short-term working capital may be eligible for a 90 percent guarantee of the principal and interest, with the maximum loan amount being $5 million. The one page application form can turnaround within 10 days. CAPLines Program The SBA will guarantee 85 percent up to $5,000,000 with four short-term workingcapital programs. The programs are Seasonal Line, Contract Line, Builders Line and Standard Asset-Based Line. The Small Asset-Based Line is an asset based $200,000 revolving line of credit. LowDoc LowDoc offers a simple one page application form with processing in two or three days for loans of up to $150,000, with 85 percent guaranteed. SBAExpress Preferred lenders may provide SBA guaranteed small business loans of $350,000 or less with a 50 percent guarantee. The loans are processed and serviced through experienced, authorized lenders. Loans under $25,000 do not require collateral. Use of proceeds follow the same guidelines as the 7a program. KSBDC Mone y Sources Directory 9
  • 10. S B A Pa r t i c i pat i n g l e n d e r s Branch Banking & Trust 5901-C Peachtree Dunwoody Rd Suite 420 Atlanta GA 30328 770-551-8822 JP Morgan Chase 416 West Jefferson St Louisville, KY 40202 502-566-3671 Clinton Bank 220 East Clay St Clinton, KY 42031 270-653-4001 Commonwealth Bank & Trust 4912 U.S. Hwy 42 Louisville, KY 40222 502-259-2469 Community Trust Bank 346 North Mayo Trace Pikeville, KY 41501 606-432-1414 Cumberland Valley National Bank P.O. Box 709 London, KY 40743 606-878-7010 Edmonton State Bank 213 North Main Street Tompkinsville, KY 42167 270-487-6123 Farmers Bank & Capital Trust 125 West Main Street Frankfort, KY 40602 502-227-1615 10 KSBDC Mone y Sources Directory Fifth Third Bank 401 South Fourth Street Louisville, KY 40202 502-562-8162 FNB Bank, Inc. 101 East Broadway Mayfield, KY 42066 270-251-6058 Fifth Third Bank of Northern Kentucky 8100 Burlington Pike Florence, KY 41042 859-283-8222 Forcht Bank, NA 2404 Sir Barton Way Lexington, KY 40509 502-267-0870 First Community Bank of Western Kentucky 114 East Jackson Street Clinton, KY 42031 270-653-4301 Heritage Bank 4155 Lafayette Road Hopkinsville, KY 270-887-2999 First Federal Savings Bank of Elizabethtown 2323 Ring Road Elizabethtown, KY 42702 270-765-2131 First Financial Bank 225 Pictoria Drive Suite 800 Cincinnati, OH 45245 513-551-5770 First Kentucky Bank, Inc. 223 South Sixth Street Mayfield, KY 42066 270-251-4960 First Security Bank of Owensboro, Inc. 300 Frederica Street Owensboro, KY 42301 270-688-4699 First Southern National Bank 102 West Main Street Stanford, KY 606-365-6971 Hometown Bank of Corbin P.O. Box 1323 Corbin, KY 40702 606-528-2000 KeyBank, National Association 303 Broadway Street, 17th Floor Cincinnati, OH 45202 513-830-1275 Kentucky Bank 401 Main Street Paris, KY 40361 859-987-1795 Kentucky Neighborhood Bank 1000 North Dixie Avenue Elizabethtown, KY 42701 270-765-4072 Magnolia Bank, Inc. 6512 West Dixie Avenue Elizabethtown, KY 42701 270-765-4072 PBI Bank 949 South Dixie Highway Munfordville, KY 42765 270-524-7283
  • 11. S B A Pa r t i c i pat i n g l e n d e r s Peoples Exchange Bank 48 Center Street Beattyville, KY 41311 859-744-9400 Republic Bank & Trust Company 661 South Hurstbourne Parkway Louisville, KY 40222 502-394-4443 South Central Bank of Monroe County 320 North Main Street Tompkinsville, KY 42167 270-487-6117 Planters Bank, Inc. 1312 Main Street Hopkinsville, KY 42240 270-886-9030 South Central Bank of Barren County 208 South Broadway Glasgow, KY 42141 270-651-7466 Stockyard Bank & Trust Company 1040 East Main Street Louisville, KY 40206 502-625-2485 PNC Bank Kentucky, Inc. Citizens Plaza Louisville, KY 40296 513-956-5159 South Central Bank of Bowling Green, Inc. 1757 Campbell Lane Bowling Green, KY 42102 270-782-9696 The Bank – Oldham County Inc. 515 South First Street LaGrange, KY 40031 502-222-2100 Regions Bank, N.A. 117 West Cedar Street Franklin, KY 42134 800-734-4667 South Central Bank of Hardin County 4079 North Dixie Highway Elizabethtown, KY 42701 270-763-9797 The Commercial Bank P.O. Box 7 Grayson, KY 41143 606-474-7811 KSBDC Mone y Sources Directory 11
  • 12. S B A Pa r t i c i pat i n g l e n d e r s The Farmers National Bank of Scottsville 107 North Court Street Scottsville, KY 42165 270-783-8300 United Citizens Bank & Trust Company P.O.Box 250 Campbellsburg, KY 40011 502-732-6669 The Huntington National Bank 710 East Main Street Lexington, KY 40502 859-361-8764 US Bank, N.A. 6010 Brownsboro Park Blvd Suite C Louisville, KY 40207 502-893-4223 The Paducah Bank and Trust Company 555 Jefferson Street Paducah, KY 42001 270-575-5796 The Peoples Bank 201 North Bardstown Road Mt. Washington, KY 40047 502-538-6060 The Sacramento Deposit Bank P.O. Box 26 Sacramento, KY 42372 270-736-2212 Town & Country Bank and Trust Company P.O.Box 305 Bardstown, KY 40004 502-348-3911 Traditional Bank, Inc. 49 West Main Street Mount Sterling, KY 40353 859-498-0414 UPS Capital Business Credit 425 Bay Hill Road Winsor, CT 06095 860-687-2699 12 KSBDC Mone y Sources Directory Whitaker Bank, Inc. P.O. Box 55439 Lexington, KY 40555 859-543-4000 Wilson & Muir Bank & Trust Company 107 North Third Street Bardstown, KY 40004 502-348-5996 SBAExportXpress Businesses who can demonstrate that loan proceeds will be used to enter a new export market or expand an existing export market and have been in operation for 12 months may be eligible for 85% guarantee for a maximum loan amount of $150,000. Patrick Hayes Regional Manager, Export Solutions Group Office of International Trade U.S. Export Assistance Center 600 Superior Ave., Ste. 700 Cleveland, OH 44114 216-522-4731 • 216-522-2235 Fax Patrick.Hayes@sba.gov
  • 13. Federal Government Money Sources Patriot Express Veterans and members of the military community may be eligible for Patriot Express loans which feature the SBA’s lowest interest rates for business loans, generally 2.25 to 4.75 over prime depending the size and maturity of the loan. Proceeds can be used for most business needs, including preparing your business for your deployment. Farmers Bank & Capital Trust 125 W. Main Frankfort, KY 40602 502-227-1615 Jonathan Mays Heritage Bank 4155 Lafayette Rd. Hopkinsville, KY 42240 270-887-2999 Roger Grogan Fifth Third Bank 401 S. Fourth Ave. Louisville, KY 40202 502-562-8162 Kathy Pleasant Kentucky Neighborhood Bank 1000 N. Dixie Ave. Elizabethtown, KY 42701 270-737-6000 Brad Burchett Branch Banking & Trust Co. 5901-C Peachtree Dunwoody Rd. Atlanta, GA 30328 770-551-8822 Ankur Patel First Financial Bank 225 Pictoria Dr., Ste. 800 Cincinnati, OH 45246 513-551-5770 Glenn Clevenger, VP Manager – SBA Lending KeyBank, National Association 303 Broadway St., 17th Fl. Cincinnati, OH 45202 513-830-1275 Steve Brooks JP Morgan Chase Bank 416 W. Jefferson St. Louisville, KY 40202 502-566-3671 Jason Adler Citizens Bank & Trust Company 201 E. Main St. Campbellsville, KY 42715 270-465-8193 Community Trust Bank, Inc. 346 N. Mayo Tr. Pikeville, KY 41501 606-437-1414 Terry Spears Edmonton State Bank 213 N. Main St. Tompkinsville KY 42167 270-487-6123 Tony High First Security Bank of Owensboro 300 Frederica St. Owensboro, KY 42301 270-688-4699 Kevin Roark First Southern National Bank 102 W. Main St. Stanford, KY 40444 606-365-6971 Doug Daniel FNB Bank, Inc. 101 E. Broadway Mayfield, KY 42066 270-251-6058 Pat Bynum Forcht Bank, N.A. 2404 Sir Barton Way Lexington, KY 40509 502-267-0870 Creighton Reiss PBI Bank 949 S. Dixie Hwy. Munfordville, KY 42765 270-524-7283 Kenneth Kidd Peoples Exchange Bank 48 Center St. Beattyville, KY 41311 606-464-3631 Allan Turner Planters Bank 1312 Main St. Hopkinsville, KY 42240 270-886-9030 ext. 1732 Janet Calhoun PNC, N.A. Citizens Plaza Louisville, KY 40202 513-956-5159 Rob Haskins KSBDC Mone y Sources Directory 13
  • 14. Federal Government Money Sources Regions Bank 250 Riverchase Pkwy., RCS 1, BLC Hoover, AL 35244 202-560-3344 David Lee South Central Bank of Monroe County 320 N. Main St. Tompkinsville, KY 42167 270-487-6117 Brian Clemmons The Paducah Bank and Trust Company 555 Jefferson St. Paducah, KY 42001 270-575-5796 Kerri Brotherson Republic Bank & Trust 661 S. Hurstbourne Pkwy. Louisville, KY 40222 502-394-4443 Karen Berry Stock Yards Bank & Trust Company 1040 E. Main St. Louisville, KY 40206 502-625-2485 Scott Parrott The Peoples Bank 201 N. Bardstown Rd. Mt. Washington, KY 40047 502-538-6060 Denise Laferty South Central Bank of Barren County 208 S. Broadway Glasgow, KY 42141 270-651-7455 Kelcey Rock The Commercial Bank P.O. Box 7 Grayson, KY 41143 606-474-7811 Jack Strother Traditional Bank, NA 49 W. Main St. Mt. Sterling, KY 40353 859-498-0414 Spears Stilz South Central Bank of Hardin County 4079 N. Dixie Hwy. Elizabethtown, KY 42701 270-763-9797 Josh Thompson The Huntington National Bank 710 E. Main St. Lexington, KY 40502 859-361-8764 Chris Jackson United Citizens Bank & Trust Co P.O. Box 250 Campbellsburg, KY 40011 502-732-6669 Roy Weeks 14 KSBDC Mone y Sources Directory
  • 15. Federal Government Money Sources US Bank, N.A. 6010 Brownsboro Park Blvd., Ste. C Louisville, KY 40207 502-893-4223 Brandon Prather Wilson & Muir Bank & Trust Company 107 N. Third St. Bardstown, KY 40004 502-348-5996 Karen McGraw Certified Development Company (504) Loan Program This program finances the purchase of fixed assets including land, buildings, machinery and equipment, and modernization or renovation of existing facilities. CDC funds cannot be used for working capital, inventory, consolidation or repayment of debt, refinancing, or financing a plant outside the U.S. and its territories. Typically, a lender institution finances 50 percent of the project, while the CDC contributes 40 percent. The remaining 10 percent must come from the borrower. Start-ups can expect to put 15 percent up front, with a 35 percent contribution from the CDC. A business must have a net worth of $7 million or less, and an average net profit after taxes for the previous two years of $2.5 million or less. For every $35,000 of invested CDC funds, one job must be created, retained or meet a public purpose criteria. 504 Lenders Capital Access Corp. - KY 401 W Main St, Ste 2010 Louisville KY 40202 502.584.2175 Fax: 502.584.2173 www.cac-ky.org Community Ventures Corp. - Lexington 1450 N. Broadway Lexington KY 40505 859.231.0054 Fax: 859.299.0261 www.cvcky.org Community Ventures Corp. - Frankfort 306 W Main St, Ste 706 Frankfort KY 40361 502.696.9444 Fax: 502.696.9493 www.cvcky.org Community Ventures Corp. - Paris 509 High St Paris KY 40361 859.340.4028 Fax: 859.340.4052 www.cvcky.org Purchase ADD, Inc. 1002 Medical Dr Mayfield KY 42066 270.247.7171 www.purchaseadd.org Small Business Investment Companies The Small Business Investment Company (SBIC) program provides venture capital to small businesses for start-up and growth. SBICs are for-profit, privately owned investment firms licensed by the SBA. SBICs provide equity capital, long-term loans, and management assistance. There are two types of SBICs; regular and specialized (SSBIC). Specialized SBICs invest in small businesses owned by socially and economically disadvantaged entrepreneurs. To be eligible for SBIC or SSBIC financing, firms must meet the SBA’s definition of a small firm. Kentucky Small Business Investment Companies Chrysalis Ventures, LLC 101 South Fifth St, Ste 1650 Louisville KY 40202 502.583.7644 Fax: 502.583.7648 www.chrysalisventures.com Mountain Ventures Inc. P.O. Box 1738 London KY 40743-1738 606.864.5175 Fax: 606.864.5194 www.khic.org The Micro-Loan Programs The SBA distributes funds to private, nonprofit groups who serve as intermediary lenders. SBA helps fund micro-loan programs to provide business access to small loans usually from $100 to $35,000. Several Kentucky organizations can assist with micro-loans. Kentucky Micro-Lenders Community Ventures Corp. – Bowling Green 2413 Nashville Rd, Ste 114 Bowling Green KY 42101 270.904.0323 Fax: 270.904.0505 www.cvcky.org KSBDC Mone y Sources Directory 15
  • 16. Federal Government Money Sources 504 Lenders cont. Community Ventures Corp. Campbellsville 107 W. Broadway Campbellsville KY 42718 270.849.2323 Fax: 270.465.0607 www.cvcky.org Community Ventures Corp. - Henderson 145 N. Main St, Fifth Fl Henderson KY 42420 270.826.7505 Fax: 270.827.2969 www.cvcky.org Community Ventures Corp. - Lexington 1450 N. Broadway Lexington KY 40505 859.231.0054 Fax: 859.299.0261 www.cvcky.org Community Ventures Corp. - Louisville 811 S 2nd St Louisville KY 40203 502.566.6076 Fax: 502.566.6078 www.cvcky.org Community Ventures Corp. - Paris 509 High St Paris KY 40361 859.340.4028 Fax: 859.340.4052 www.cvcky.org Kentucky Highlands Investment Corp. P.O. Box 1738 London KY 40743-1738 606.864.5175 Fax: 606.864.5194 www.khic.org 16 KSBDC Mone y Sources Directory Purchase ADD, Inc. 1002 Medical Dr Mayfield KY 42066 270.247.7171 www.purchaseadd.org CDBG funds are granted to these cities and counties. Not all communities make business loans. Contact your local Department of Community Development or Department of Housing Official for more information. Pre-Qualified Loan Program The U.S. Small Business Administration has created the Pre-Qualification Loan Program to help small businesses that have traditionally been underserved by the lending community. Upon approval, SBA will issue a guarantee commitment letter for up to $250,000. Based on the commitment letter, SBA lenders can provide expedited consideration. US Dept of Housing and Urban Development CPD Field Office 601 W Broadway Louisville, KY 40202 (502) 618-8143 Washington, D.C. (202)708-1871 Roger.A.Leonard@hud.gov U.S. Small Business Administration 600 Dr. M. L. King Jr. Pl Louisville KY 40202 502.582.5971 www.business.usa.gov US Dept of Housing and Urban Development US Dept of Agriculture Business and Industrial Guaranteed Loans The U.S. Department of Agriculture (USDA) provides loan guarantees through private lenders in rural areas of Kentucky. Guarantees can cover a maximum of 80 percent for loans under $5 million, 70 percent for loans from $5 to $10 million, and 60 percent for loans in excess of $10 million. Community Development Block Grant Loans (Section 108 Program) Federal funds are allocated by the Department of Housing and Urban Development (HUD) to fund economic development activities in Kentucky under the Community Development Block Grant program (CDBG). Communities typically make loans available from those funds to draw needed economic expansion and revitalization projects. Loans must be made in an area with a population of less than 50,000. Priority is give to applications made in rural communities and towns of 25,000 or less. Funds may be used to purchase land, building, machinery, equipment, furniture and fixtures; to finance construction, expansion, repair, or modernization of buildings; to provide start-up and working capital; and to aid in agricultural production. Funds may also be used to refinance existing debt if it is necessary to save existing jobs or improve cash flow. These cities and counties are eligible: Ashland, Covington, Henderson, Hopkinsville, Owensboro, Lexington/Fayette County, and Louisville/Jefferson County. Business and Industrial Direct Loans Direct loans expand the available credit for businesses that do not qualify for private funding to create/retain jobs and
  • 17. Federal Government Money Sources improve the economic climate in targeted rural communities. The loan may be used for business and industrial acquisitions, construction, expansion, repair and development costs. Certain conditions apply to the use of funds for purchase of equipment, machinery, supplies, start-up costs and working capital. Rural Development State Office Rural Business-Cooperative Service (RBS) 771 Corporate Dr, Ste 200 Lexington KY 40503 859.224.7300 Fx: 859.224.7425 www.rurdev.usda.gov/ky/ Loans may be used for acquiring or enlarging a farm, paying closing costs, purchasing livestock, equipment supplies, closing costs or conservation improvements. US Dept of Agriculture Farm Service Agency Kentucky State Office 771 Corporate Dr, Ste 100 Lexington KY 40503 859.224.7601 Fx: 859.224.7691 www.rurdev.usda.gov/ky/ Export-Import Bank of the United States Guaranteed Farm Ownership and Operation Loans Loans administered by the Farm Service Agency help farmers obtain commercial credit to establish or maintain a farm or ranch. Guarantees are provided that cover up to 90% of the value of a new loan up to $762,000 in rural communities of 50,000 or less population. Loans may be used for purchase of land, capital improvements, livestock, equipment, quotas and bases; production, processing and marketing purposes; payment of loan closing costs, land and water development and conservation, farm and home needs. Working Capital Loan Guarantee Program The Export-Import Bank of the United States (Ex-Im Bank) is a government agency which assists export financing of U.S. goods and services through loan, guarantee, and insurance programs. Working capital loans are guaranteed up to 90 percent of principal and interest. Working capital loans must be secured by inventory, accounts receivable, or other appropriate collateral. Proceeds may be used for pre-export activities such as the purchase of inventory, raw materials, the manufacture of a product, or marketing. Direct Farm Ownership and Operating Loans Loans are awarded to farmers who are US citizens unable to obtain credit to traditional commercial sources that have a good credit history and a demonstrable ability to repay the loan. Maximum loan amounts for both ownership and operating loans are $200,000. Interest rates are typically based on the government’s cost of borrowing for regular loans and 4% for down payment loans. The Export Import Bank 202.565.3946 800.565.EXIM www.exim.gov Small Business Innovation Research Program The Small Business Innovation Research Program (SBIR) awards grants for research and development. The program is designed to promote technology-based firms by providing “idea money” to help develop new technologies. Projects funded by SBIR are usually too early, too high-risk or too expensive for banks, venture capitalists, or internal funding.A company must meet research requirements identified above and be a for-profit American firm with less than 500 employees. Firms may receive award money in three phases. Phase 0 funding is to support preparation of Phase 1 proposals in amounts up to $4,000. Phase I is to evaluate the technical merit and feasibility of an idea. Awards are for periods of up to six months in amounts up to $100,000. Phase II is to expand on the results and further pursue the development of Phase I. Awards are for periods of up to two years in amounts up to $750,000. Only those companies awarded money in Phase I may compete for money in Phase II. U.S. SBA Office of Technology 409 Third St SW Washington DC 20416 (202) 205-6450 www.sba.gov/sbir/ KSBDC Mone y Sources Directory 17
  • 18. S tat e G o v e r n m e n t M o n e y S o u r c e s State Government Money Sources Kentucky Economic Development Cabinet Kentucky Economic Development Finance Authority Direct Loan Program The Kentucky Economic Development Finance Authority (KEDFA) direct loan program offers loans to work in conjunction with private financing. Eligible projects are agribusiness, manufacturing, or service and technology industries. No retail projects are eligible. Projects must create at least one new fulltime job within one year of the loan closing date. KEDFA funds may only be used for fixed asset financing. KEDFA can fund up to 100% of the project costs, or the loan can be used in conjunction with other lenders. All loans will be secured with the highest lien position available. KEDFA may participate up to 25 percent of project fixed asset costs, but amount of participation is based upon the number of jobs created. Loan amounts range between $15,000 and $100,000. KEDFA will not lend more than the private lending institution toward the fixed assets. Dept of Financial Incentives Old Capital Annex 300 W Broadway Frankfort KY 40601 502.782.1978 18 KSBDC Mone y Sources Directory Industrial Revenue Bond Financing Industrial Revenue Bonds (IRBs) are issued by Kentucky’s state and local governments to provide low-cost financing. Bond funds can be used to finance the entire project including engineering, land, buildings, equipment, and issuance costs. The primary advantage of IRB financing is that interest income from the bonds is exempt from federal income taxes, resulting in a lower rate of interest for the money used to finance the project. In addition, state statutes declare that a facility financed by IRBs is public property for as long as the title is held by the public body that issues the bonds. As public property, it is exempt from all state and local property taxes, except for a nominal state leasehold tax of $.015 per $100 of leasehold value. Department of Financial Incentives Old Capital Annex 300 W Broadway Frankfort KY 40601 502.782.1987 Fx: 502.564.7697 www.thinkkentucky.com/kyedc/kybizince.aspx Kentucky Small Business Credit Initiatives Kentucky’s Cabinet for Economic Development offers three new credit enhancement programs thanks to an allocation of federal funding received by the United States Department of Treasury. Kentucky’s allocation of funds have allowed the Cabinet to increase the availability of credit to small businesses by reducing the risk participating lenders, credit unions and community development financial institutions assume. Eligible borrowers include corporations, partnerships, state-designated charitable, religious, and other nonprofits, government-owned corporations, consumer and marketing cooperatives, and faithbased organizations, provided the loan is for a qualified business purpose. An eligible borrower must have 500 or fewer employees and be Kentucky residents. Loan proceeds can be used for eligible purposes such as, but not limited to, start-up costs, working capital, business acquisitions and expansions, franchise financing, equipment loans, inventory financing, owner occupied commercial real estate acquisitions, renovation and construction. Kentucky Loan Participation Program (KYLPP) This program assists borrowers whose cash flow does not meet a lender’s coverage requirements by allowing the Cabinet to purchase (or participate in) a portion of the loan from the lender. Participating lenders have the option of offering a grace period for payment of interest and/or principal up to 24 months.
  • 19. S tat e G o v e r n m e n t M o n e y S o u r c e s Kentucky Collateral Support Program (KYCSP) This program provides a pledged asset (cash) to participating lenders to enhance collateral coverage of the small business owner that is otherwise qualified, but unable to meet the lender’s security requirement. Kentucky Capital Access Program (KYCAP) Offers participating lenders loan portfolio insurance by providing a matching contribution to the lender’s loan loss reserve account when they extend credit to qualified, creditworthy small businesses. In the case of a loss, lenders may draw against the account to offset the loss. To find a participating lender in your area, or obtain additional information about the programs, visit www.ThinkKentucky.com/ smallbizlending or contact Mark Johnson at 800-626-2930 or email MarkL.Johnson@ ky.gov Incentive Programs Kentucky Rural Economic Development Act (KREDA) New and expanding manufacturing projects under KREDA may potentially receive state income tax credits and job assessment fees for up to 100% of their capital investment for up to 15 years on land, buildings, site development, building fixtures and equipment used in a project. Kentucky Jobs Development Act (KJDA) KJDA projects may receive a 100% credit against the state income tax arising from a project and may collect a job assessment fee of up to 5% of the gross wages of each employee whose job is created by the project and who is subject to Kentucky income tax. Amounts can be up to 50% of project start-up cost and up to 50% of annual facility rental cost or rental value for up to 10 years. The local community must approve the project prior to the submission of an application. Kentucky Industrial Development Act (KIDA) Similar to KREDA, this program is for new and expanding manufacturing projects. Projects approved under KIDA may receive state income tax credits for up to 100% of its capital investment for up to 10 years on land, buildings, site development, building fixtures and equipment used in a project. Or, the company may collect a job assessment fee of 3% of the gross wages of each employee whose job is created by the approved project and who is subject to Kentucky income tax. Kentucky Economic Opportunity Zone Program (KEOZ) Counties, urban county governments, or cities of the first class apply through KEDFA (see above) for certification of an Opportunity Zone based on qualifying census tract information. New or expanding manufacturing or service/ technology companies may be permitted the following inducements under the KEOZ program: An income tax credit of up to 100% of the Kentucky income tax liability on income generated by or arising out of the project; and a job development assessment fee of up to 5% of gross wages. Kentucky Investment Fund Act (KIFA) KIFA provides tax credits to individuals and companies that invest in approved venture capital funds. Investors in KIFA approved funds are entitled to a 40% credit against Kentucky individual or corporate income tax or Kentucky corporate license tax. KEDFA (see above) approves investment funds and fund managers. Kentucky Cabinet for Economic Development Department of Financial Incentives Old Capital Annex 300 W Broadway Frankfort KY 40601 502.782.1987 Fx: 502.564.7697 www.thinkkentucky.com/kyedc/kybizince.aspx KSBDC Mone y Sources Directory 19
  • 20. S tat e G o v e r n m e n t M o n e y S o u r c e s Linked Deposit Loan Program The State Investment Commission invests funds from the state’s Abandoned Property Cash Account at a set rate with eligible lenders. In turn, the financial institutions agree to lend the proceeds of the funds to eligible small business borrowers at attractive rates. Any Kentucky small or agricultural business is eligible for the loans with the following limitations: 1) Must be headquartered and maintaining operations in Kentucky. 2) $1 million or less per year in gross annual earnings 3) Fewer than 50 full time employees. 20 KSBDC Mone y Sources Directory 4) No applicant can be an officer or director of eligible lending institutions. The loans may be used for working capital, interest costs, capital expenses and debt refinancing. The maximum loan amount is $100,000 with repayment due in seven years. The interest rate is based on the prime rate and collateral requirements are negotiated by the borrower and the lender. Linked Deposit Loan Program Old Capital Annex 300 W Broadway Frankfort KY 40601 502.564.7140 www.thinkkentucky.com/kyedc. linkdeposity.aspx Office of the New Economy Innovation and Commercialization Centers These centers are public/private partnerships that will assist the state’s entrepreneurs and scientists commercialize technologies that demonstrate significant market potential. Kentucky’s ICCs are designed to serve two groups of clients: the entrepreneur who wants to create a technology-based company and the scientist who wants to commercialize a technology. ICCs will help scientists and entrepreneurs understand the start-up process and investment practices. The ICC’s enlist a network of investors to review and participate in funding entrepreneurs who follow the ICC business process.
  • 21. S tat e G o v e r n m e n t M o n e y S o u r c e s Rural Innovation Fund For use in rural Kentucky, this fund is specifically for businesses with no more than 150 employees. It is divided into two phases. Phase I funds are a one time investment of up to $7,500 to provide capital for proof of concept and early stage prototype development. Phase II funding is only allocated after successful Phase I work. It provides a maximum of $100,000 over a two year period, not to exceed $50,000 in any one year. Research and Development Fund This fund is reserved for Kentucky businesses with less than 150 employees who contract with a Kentucky university. The R&D fund is for investment in technology refinement, prototype and commercial product development. The fund amount is for a maximum of $200,000 not to exceed $100,000 in any one year. Kentucky Commercialization Fund This fund is allocated for investment in university based technology commercialization. Up to $225,000 is granted over three years, not to exceed $75,000 over any one year period. Kentucky ICC Office Laurie Daugherty 200 W Vine St Lexington KY 40507 lcdaugherty@kstc.com 859.246.3225 www.kyinnovation.com ICC Satellite Offices Ashland ICC Mick Fosson 1400 Winchester Ave Ste 600 Ashland KY 41101 606.326.2239 Bowling Green ICC Doug Rohrer 2413 Nashville Rd, Ste B8 Bowling Green KY 42101 270.901.3490 Covington ICC Casey Barach 535 Madison Ave, Ste 400 Covington KY 41101 859.292.7781 Elizabethtown ICC Lisa Williams RR Thomas Bldg 14 Public Sq, Ste 6 Elizabethtown KY 42701 270.765.1855 Lexington ICC Warren Nash 330 E Main St, Ste 210 Lexington KY 40507 859.257.6871 Morehead ICC Johnathan Gay 150 University Dr West Liberty KY 41472 606.743.4005 x211 Murray ICC Loretta Daniel 926 N 16th St Murray KY 42071 270.809.6071 Owensboro ICC Madison Silvert 200 E 3rd St, Ste 301 Owensboro KY 42303 270.663.1050 Paducah ICC Ian Blacke 401 Kentucky Ave Paducah KY 42003 270.443.1746 x220 Richmond ICC Kristel Smith BTC 041 - 521 Lancaster Ave Richmond KY 40475 859.622.8571 London ICC Bill Schutters 440 Old Whitley Rd London KY 40744 859.806.8258 Louisville ICC Tendai Charasika 614 W Main St, Ste 6000 Louisville KY 40202 502.625.0140 KSBDC Mone y Sources Directory 21
  • 22. Regional Government Money Sources Regional Government Money Sources Area Development Districts Loans for local businesses and business start-ups may be available through many city and county governments and area development districts (multi-county government services planning agencies). Loans are usually restricted to $500,000 or less, or to a specified amount per job created or saved. The balance of financing for a project must come from owner equity or from other private or public lenders. Terms and interest rates are set by local government lending agencies. Barren River Area Development District 177 Graham Ave PO Box 90005 Bowling Green KY 42101 270.781.2381 FX: 270.842.0768 www.bradd.org Big Sandy Area Development District 110 Resource Ct Prestonsburg KY 41653 606.886.2374 Fx: 606.886.3382 ext 208 www.bigsandy.org 22 KSBDC Mone y Sources Directory Bluegrass Area Development District 699 Perimeter Dr Lexington KY 40517 859.269.0821 Fx: 859.269.7917 www.bgadd.org Green River Area Development District 300 GRADD Way Owensboro KY 42301 270.926.4433 Fx: 270.684.0714 www.gradd.com Buffalo Trace Area Development District 201 Government St PO Box 460 Maysville KY 41056 606.564.6894 Fx: 606.564.0955 www.btadd.com Kentucky River Area Development District 917 Perry Park Blvd Hazard KY 41701 606.436.3158 Fx: 606.436.2144 www.kradd.org Cumberland Valley Area Development District 342 Old Whitley Rd PO Box 1740 London KY 40743 606.864.7391 800.795.7654 Fx: (606) 878-7361 www.cvadd.org FIVCO Area Development District 32 FIVCO Ct Grayson KY 41143 606.929.1366 Fx: 606.929.1390 www.fivco.org Gateway Area Development District 110 Lake Park Dr Morehead KY 40351 606.780.0090 Fx: 606.780.0111 www.gwadd.org KIPDA 11520 Commonwealth Dr Louisville KY 40299 502.266.6084 Fx: 502.266.5047 www.kipda.org Lake Cumberland Area Development District 2384 Lakeway Dr PO Box 1570 Russell Springs KY 42642 270.866.4200 800.264.7093 www.lcadd.org Lincoln Trail Area Development District 613 College Street Rd PO Box 604 Elizabethtown KY 42702 270.769.2393 800.247.2510 Fx: 270.769.2993 www.ltadd.org
  • 23. Regional Government Money Sources Mayor’s Office of Economic Development 200 E Main St Lexington KY 40507 859.258.3100 http://www.lexingtonky.gov/index. Northern Kentucky Area Development District 22 Spiral Dr Florence KY 41042 859.283.1885 www.nkadd.org Pennyrile Area Development District 300 Hammond Dr Hopkinsville KY 42240 270.886.9484 Fx: 270.886.3211 www.peadd.org Purchase Area Development District 1002 Medical Dr Mayfield KY 42066 270.247.7171 Fx: 270.251.6110 www.purchaseadd.org TVA Loans: Southwestern Kentucky This multimillion-dollar revolving loan fund is designed to stimulate capital investment and job creation in the TVA region. Applications are evaluated based on a project’s financial viability, its local economic impact, the amount of funds leveraged, and the expected increase in power sales. Extra emphasis is given to industrial expansion and relocation projects in economically underdeveloped areas of the valley. Eligible loans must be co-sponsored by local government, a power distributor, or an economic development agency. New or expanding manufacturers in the TVA’s 21-county service area located in south central and western Kentucky may be eligible for loans based on job creation and electrical load. These loans are available for companies to finance fixed assets such as land, buildings, or equipment. The funds cannot be used for working capital. TVA participation in these loans is normally limited to $5,000 per job created, with loans ranging from $50,000 to hundreds of thousands of dollars where project size warrants. Borrowers must contribute a minimum of ten to fifteen percent of project equity. Terms are usually five to seven years on equipment and ten years on property and plant. Rates are subject to negotiation, but are generally set below prime rate. Tennessee Valley Authority 4537 Ft Campbell Blvd, Ste 103 Hopkinsville KY 42240 270.887.8466 and 6045 Russellville Rd Bowling Green KY 42101 www.tva.gov http://www.tvaed.com/loans.htm TVA Supported Incubators Business incubators are facilities designed to help new businesses get started by providing affordable rental space, onsite support services, and technical assistance (including financial and legal advice) in a unique environment that fosters growth. Firms housed in TVA-assisted business incubators can apply for money from TVA’s Business Incubator Loan Fund, a revolving fund capitalized at $500,000 that is designed to help young businesses meet their short-term needs for cash flow and operating capital. The largest loan amount available is $25,000, for a maximum term of one year. A loan request must be supported by purchase orders, invoices, or accounts receivable. Regional Business Innovation Center 926 N 16th St Murray KY 42701 270.809.6071 http://www.tvaed.com/busincub.htm Rural Electrification (REA) Loans Rural electrification (REA) loans are interest-free loans available to qualifying businesses that create jobs in rural areas served by four Kentucky rural electric cooperatives and two rural telephone cooperatives. Qualifying businesses can borrow from $10,000 to $400,000 with a maturity of up to ten years. Projects eligible for funding include new and expanding manufacturing, industrial buildings, agricultural processing, telemarketing, recycling operations, water and sewer extensions, and feasibility studies. Applications for REA loans are judged by several factors including economic need in the project area, jobs created, and probability of long-term success. Processing of applications can take from four to six months. KSBDC Mone y Sources Directory 23
  • 24. Regional Government Money Sources These cooperatives participate in the REA business loan program in their service area: Meade County RECC Tim Gossett Hwy 79 at Hwy 1051 P.O. Box 489 Brandenburg KY 40108 (270) 422-2162 Warren RECC Heather Foley 951 Fairview Avenue P.O. Box 1118 Bowling Green, KY 42102 (270) 842-6541 Mountain Association for Community Economic Development This is a private community development corporation that provides loans, financial planning, and technical assistance to qualifying new and expanding companies in the 49 Appalachian counties of eastern Kentucky. MACED offers below-market interest rates and innovative financing options by packaging loans with both public and private resources. Local business start-ups and expansions that create jobs and support local community development and economic expansion are eligible. Loans range from $50,000 to $500,000 and may be used to finance working capital or purchase fixed assets. Maturities up to ten years are available. MACED 433 Chestnut Street Berea, KY 40403 (859) 986-2373 Fax (859) 986-1299 http://www.maced.org P RIVATE CA P ITA L Private Capital Private investment firms are formed by high net worth individuals and vary widely in their operating style and investment preferences. Some are founded and run by a single individual who makes all the decisions. Others are comprised of several high net worth individuals who empower an “investment committee.” The level of operating control expected by these investors will vary from firm to firm- some seek a passive, minority investment position while others want a board seat and/or operating control. Blue Equity, LLC Jonathan S. Blue 502.589.8181 Preston Pointe 333 E Main St, Ste 200 Louisville KY 40202 www.blueequity.com Alliance Group Mike Pitino 502.253.6881 Louisville KY 40223 www.alliancegrouponline.com Futurity Investment Group Rod McNerney 502.583.3038 900 Baxter Ave Louisville KY 40204 24 KSBDC Mone y Sources Directory Evermore Investments, LLC Dean Holland 502.292.2393 11405 Park Rd, Ste 180 Anchorage KY 40223 www.evermoreinvestments.com Pattco Ventures Tom Dieruf 502.245.6623 10000 Shelbyville Rd Louisville KY 40223 The Yearling Fund Dale Boden 502.587.1860 Preston Pointe 333 E Main St, Ste 310 Louisville KY 40202 Anchorage Angels Greg Chapman, Manager 808 Towner Pl Anchorage KY 40223 gregchky@insightbb.com anchorageangelsiii@gmail.com
  • 25. VENTURE CA P ITA L Venture Capital Venture capital is funds from investors who take an ownership role in the company. These funds generally go to high growth companies that offer above average rates of return-on-investment, often as high as 30%. Business owners seeking these funds must be willing to give up some control of their company and plan to extract the funds, including returns, from the business in 5 to 7 years. Chrysalis Ventures LLC David A Jones, Jr 101 South Fifth Street, Suite 1650 Louisville, KY 40202 502.583.7644 www.chrysalisventures.com Draper Triangle Ventures Mark Richey 513.263.2732 30 W Third St, Sixth Floor Cincinnati OH 45202 www.drapertriangle.com Heron Capital Shannon Rothschild 317.686.1950 1 Indiana Sq, Ste 2250 Indianapolis IN 46204 www.heroncap.com River City Capital Funds Ted Robinson 513.621.9700 221 E Fourth St, Ste 2400 Cincinnati OH 45202 Triathlon Medical Ventures George Emont 502.410.1652 222 S First St, Ste 200 Louisville KY 40202 gemont@tmvp.com www.tmvp.com UPS Strategic Enterprise Fund 55 Glenlake Parkway NE Bldg 1, 4th Floor Atlanta GA 30328 sef@ups.com Mountain Ventures Inc. Kentucky Highland Investment Corporation 362 Old Whitley Rd P.O. Box 1738 London, KY 40743 606.864.5175 www.khic.org Venture Connectors 550 S 4th St Louisville KY 40202 502.719.0012 www.ventureconnectors.org contact@ventureconnectors.org Village Ventures, Inc One Bank St Williamstown MA 01267 413.458-0038 www.villageventures.com Office for the New Economy 702 Capitol Ave, #256 Frankfort KY 40601 502.564.0531 Fax: 502.564.6684 ONE@mail.state.ky.us www.one-ky.com/capital.html Allos Ventures John McIlwraith 513.723.2300 250 E Fifth St Cincinnati OH 45202 www.allosventures.com KSBDC Mone y Sources Directory 25
  • 26. Seed Funds Seed Funds Seed funds provide the funds necessary to start an enterprise and sustain it until it has enough funds to sustain itself or where it reaches a state where it has created something in value that is worthy of future rounds of funding. Seed money is usually used for such preliminary operation such as market research or product development. Seed Fund managers will often seek a board position. Commonwealth Seed Capital Gene Fuqua 502.564.1910 300 W Broadway, Old Capital Annex Frankfort KY 40601 csc@ky.gov Kentucky Seed Capital Fund George Emont & Steve Gailer 502.410.1652 222 S First St, Ste 200 Louisville KY 40202 www.kyseed.com Cardinal Venture Fund Prof. Van Clouse 502.852.4782 University of Louisville College of Business Louisville KY 40292 business.louisville.edu/content/ view/450/625/” The Vogt Invention and Innovation Awards Lisa Bajorinas 502.635.0133 Louisville, KY 40202 LBajorinas@GreaterLouisville.com www.vogtawards.com Venture Connectors 550 S 4th St Louisville, KY 40202 502.719.0012 www.ventureconnectors.org contact@ventureconnectors.org Growing Small Businesses 502.625.0123 26 KSBDC Mone y Sources Directory
  • 27. Angel Investors Angel Investors An Angel Investor is an affluent individual or group of individuals who provide capital for business start-up in exchange for equity or convertible debt. Angels invest their own money and often become mentors and advisors to the companies in which they invest. Enterprise Angels Tendai Charasika 502.625.0140 TCharasika@GreaterLouisville.com Lisa Bajorinas 502.625.0133 LBajorinas@GreaterLouisville.com 614 W Main St Ste 6000 Louisville KY 40202 www.angelsoft.net/angel-group/ louisvilles-enterprise-angels Innovation Angels Paul Moses Larry Mand Purdue Research Park 3000 Technology Dr New Albany IN 47150 502.645.8272 innovationangels@gmail.com Louisville Angel Investor Network Tom McMahon 502.561.1240 207 W Market St, Third Floor Louisville KY 40202 Tom@GrowthServicesLLC.com www.louisvilleangelnetwork.angelgroups.net Bluegrass Angels & Bluegrass Angel Venture Funds Dean Harvey 859.257.1930 330 E Main St, Ste 210 Lexington KY 40507 www.bluegrassangels.com Queen City Angels Jim Cunningham 513.477.0809 4555 Lake Forest Dr, Ste 650 Cincinnati OH 45242 www.qca.com Crowdfunding Crowdfunding Crowdfunding is a financing method that involves funding a project with relatively modest contributions from a large group of individuals, rather than seeking substantial sums from a small number of investors. The funding campaign and transactions are typically conducted online through dedicated crowdfunding sites, often in conjunction with social networking sites. Depending on the project, campaign contributors may be essentially making donations, investing for a potential future return on investment (ROI), or prepaying for a product or service. Kickstarter.com Kickstarter is the 800 pound gorilla in crowdfunding, originally designed and built for creative arts, many technology entrepreneurs now use the site, some reporting to have raised millions of dollars. Rockethub.com Rockethub is a broad platform targeting “artists, scientists, entrepreneurs, and philanthropists” on their site, using a keepwhat-you-raise model that rewards you for hitting your funding goal (or penalizes you for failing to hit it). Indiegogo.com Indiegogo allows you to raise money for absolutely anything, using an optional “keep what you raise” model with higher fees or pay less to use an all-or-nothing funding approach. KSBDC Mone y Sources Directory 27
  • 28. Mezzanine Financing Mezzanine Financing Mezzanine financing is also known as subordinated debt, which ranks below senior debt, but above equity in priority of payment. When a company determines that it’s not capable of financing its growth plans with senior debt, the first step is to partner with a financial institution to locate an investor willing to provide capital in the form of long-term subordinated debt, usually carrying a fixed interest rate. Generally, these loans do not involve ownership or management participation; however they do include success fees or warrants to purchase equity at a later date. 28 KSBDC Mone y Sources Directory A clear advantage of mezzanine financing is the flexibility it affords both lenders and borrowers. The parties can devise a mezzanine package that contains just the right trade-off between equity dilutions on the one hand and interest charges on the other. Many commercial lenders and private investment firms offer Mezzanine financing. You may want to consider mezzanine financing if your company has a record of strong cash flow and needs more funds than traditional senior debt can supply. Charles & Associates 320 Whetstone Alley #B Cincinnati, OH 45202 513-621-5600 502.625.0123
  • 29. N o n - p r o f i t O r g a n i z at i o n s Non-profit Organizations Kentucky Highlands Investment Corp KHIS is a venture capital development firm founded in 1968 to service Southeastern Kentucky. KHIC maintains a multi-million dollar capital pool and has numerous investments in its portfolio ranging from $100,000 to more than a million dollars. KHIC helps small businesses through venture capital debt and equity investments for projects such as start-ups, expansions, and relocations of manufacturing, distribution, and services firms. Appalachian Capital Corporation is a fund which provides financing to viable businesses located or locating in Southeast Kentucky. The maximum loan amount is $250,000. Proceeds may be used to finance the purchase or construction of fixed assets, or for working capital. Micro Enterprise Loan Fund is designed to encourage the development of small businesses by extending credit and providing technical assistance. Funds may be used for the purchase of equipment or for working capital for the business and loan terms cannot exceed six years. A 5% minimum equity investment and personal guarantee are required. Kentucky Highland Investment Corporation 362 Old Whitley Rd PO Box 1738 London KY 40743 606.864.5175 www.khic.org Human/Economic Appalachian Development, Inc. Community Loan Fund HEAD Community Loan Fund is a non-profit revolving loan fund which provides loans to individuals, cooperatives and organizations starting or expanding small businesses in Central Appalachia. Loans are made to start-up or existing small businesses in Southeastern Kentucky that support the Appalachian culture. Maximum loan amounts are $25,000 for new businesses and $50,000 for existing businesses. Interest rates vary between 8 and 12 percent and maturities range from 1 to 5 years. Loans are repaid in monthly installments. A one percent loan fee is charged upon approval of the loan. HEAD Corporation P.O. Box 504 Berea KY 40403 859.986.8423 www.headcorp.org Metro Louisville Metropolitan Business Development Corporation (METCO)/Louisville Dept of Economic Development Growth and Innovation METCO is a nonprofit corporation operating on behalf of the city of Louisville/Jefferson County that provides loans to small businesses located within the city. Priority is given to projects that provide maximum job creation or that hire individuals from low to moderate income families. The Business Loan Program provides longterm loans up to $100,000 at near-market rates to be leveraged with private sector financing. Program loans make up the difference between available private sector financing and the funding necessary for a project’s success. Neighborhood Commercial Development Loan Program makes available up to $10,000 per storefront at 5% to businesses in target areas for development and revitalization projects. Minority Loan Program makes available up to $100,000 at below market rate financing to help leverage capital financing from private sources for women and ethnic/minority businesses. METCO 444 S 4th St Ste 600 Louisville KY 40202 502.574.4140 www.louisvilleky.gov/economicdevelopment/ KSBDC Mone y Sources Directory 29
  • 30. N o n - p r o f i t O r g a n i z at i o n s Community Services & Revitalization Microenterprise Loan Program Many low to moderate income entrepreneurs starting a new business have difficulty securing traditional business financing. To address these challenges, CSR provides loans to help create or expand small businesses in Louisville and Jefferson County Loans awarded if the business meets certain thresholds. CSR staff is required to monitor the businesses monthly in addition to certain other requirements. Applicants must meet the following criteria: • Must employ five or less employees • Business owner(s) household income must fall at or below 80% of AMI • Business must be located within Louisville Metro and the owner(s) must reside in Louisville • Must be willing to allow CSR staff to monitor the business on a monthly basis until the loan is paid in full • Loans must be used for eligible activities Community Services & Revitalization 810 Barrett Avenue Louisville, KY 40204 502-574-5866 or 502-574-5186 www.louisvilleky.gov/CAP 30 KSBDC Mone y Sources Directory Southern Kentucky Economic Development Corporation (SKEDC) SKEDC provides financing for fixed assets in qualified projects with a secured loan of up to $10,000 per new job created, not to exceed $250,000 or 45% of the project cost, whichever is less. These funds may be used to assist in the purchase of land, the purchase of existing buildings, new construction, or the purchase of equipment. The interest rate is fixed for the life of the loan, and is determined by the length of term. Economic Development Loan Fund The purpose of the Economic Development Loan Fund is to enhance job creation by providing below-market-rate, fixed-asset financing to established manufacturing industries which need assistance in purchasing equipment or purchasing and constructing new facilities. The maximum loan is 45% of the project, not to exceed $150,000. Projects must create one new job per $10,000 invested, or have a significant impact on the economic growth of a community. Small Business Loan Fund Loan proceeds may be used by small owners to finance the purchase and/or construction of fixed assets, which includes land, buildings, and equipment. The maximum loan amount is the lesser of 45 % of the total project cost or up to $250,000. The minimum loan size is $25,000. Projects must create one new job per $10,000 invested or have a significant impact on the economic growth of a community. The Southern Kentucky Economic Development Corp. 2292 South Highway 27, Suite 340 Somerset, KY 42501 (606) 677-6100 Fax (606) 677-6010 www.southeastkentucky.com
  • 31. Louisville Small Business Development Center 502-625-0123 SBDCInfo@UKy.edu KSBDC.org/Louisville