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Government & Community Assistance to Obtain Money

166 Direct Loan Program

Financial Resources For Northwest & West Central Ohio Entrepreneurs


Purpose of Program

Promote economic development, business expansion and, job creation by providing financial assistance for eligible projects in the State of Ohio. The 166 Direct Loan Program provides low-interest loans to businesses willing to commit to creating new jobs or preserving existing employment opportunities in the State of Ohio.

Eligible Businesses

Eligible businesses include those engaged in, but not limited to, manufacturing, research and development, and distribution. Retail projects are ineligible for the 166 Program.

Eligible Use of Funds

Purchase of land and/or building; if the project involves the purchase of an existing building, the business must occupy at least 51 percent of the premises

Purchase of machinery and equipment

Building construction and/or renovation costs; if the project involves new construction. The business must occupy at least 60 percent of the premises

Long-term leasehold improvements

Purchase of ongoing business’ fixed-assets

Limited soft costs directly related to the fixed-asset purchase

Refinancing is ineligible

Loan Amounts

The 166 Direct Loan Program may finance up to 50 percent of eligible project costs directly related to the fixed-asset purchase. The minimum loan amount is $500,000 and the maximum is $1,500,000. The Ohio Department of Development requires, under the 166 Direct Loan Program, the creation or retention of one job for each $50,000 of loan proceeds within a three-year period.

Repayment Term

The term of any loan awarded through the 166 Direct Loan Program is conditioned upon the useful life of the financed assets with the maximum limit up to 15 years for real estate and up to 10 years for machinery and equipment.

Interest Rates

Interest rates for the 166 Program are fixed at/or below market rates and typically do not exceed 2/3 of the current prime rate.


A $1,500 non-refundable application fee is required upon filing a completed Financial Assistance Application.

• A processing fee of two percent of the loan amount due upon receipt of a signed loan commitment letter. In the case of loan amounts exceeding $1 million, the processing and commitment fee will be two percent of the first million and one percent of the balance of the loan up to a maximum of $50,000.

• An annual servicing fee equal to a quarter of one percent (.25 percent) of the outstanding principal amount of the loan..



Collateral, Security

The Ohio Department of Development will require a shared first priority mortgage and/or lien position on assets financed with the loan proceeds to be established via a multi-party agreement between the participating lender(s), the Ohio Department of Development, and the borrower. The following may be required: personal guarantees from owners with more than 20 percent ownership in the company, corporate guarantees from related companies, full or partial letter of credit, life insurance on key business owners and/or managers, and/or other types of credit enhancement, if necessary.


Participation Requirements

At least 50% of the allowable project costs must be funded by the borrower either directly or indirectly through third party investors and/or lenders.

Additional Considerations

The Ohio Department of Development requires a minimum of 10 percent equity. The equity requirement may be higher for start-ups and special purpose facilities.

Ohio prevailing wage is required for construction, renovation, and installation of machinery and equipment. Rates and payment of prevailing wages are determined by the Ohio Department of Commerce’s Wage and Hour Bureau.

Program Funding Source

How to Apply

Contact the Ohio Department of Development staff to discuss the project. Submit a completed Financial Assistance Application. An eligibility review and credit analysis will be conducted by the Ohio Department of Development staff.

Links to Loan Application and/or Specific Information

Ohio Department of Development
Strategic Business Investment Division
Office of Financial Incentives
77 South High Street, 28th Floor
Columbus, Ohio 43215-6130

Useful Information

Interest Rate Links

Business Management Links

Glossary of Important Financial Terms You Should Understand

How To Prepare A Business Plan to Obtain Money

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