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Minority Business Bonding Program

Financial Resources For Northwest & West Central Ohio Entrepreneurs

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Purpose of Program

Provides bid, performance, and payment surety bonds to state certified minority-owned businesses that are unable to obtain bonding through standard surety companies. 

Eligible Businesses

Eligible businesses must be certified by the Ohio Department of Administrative Services Equal Opportunity Coordinator as a Minority Business Enterprise (MBE).  To be eligible for this program, the business must have been denied a bond by two surety companies within the current fiscal year; the project must be economically sound; and the minority business must not have defaulted on a previous bond issued by the Ohio Department of Development. The business must demonstrate the benefit to Ohio residents by increasing employment opportunities.

Eligible Use of Funds

The maximum bonding line pre-qualification is $1 million per business.  The premium for each bond requested is 2 percent of the face value of the bond. 

Loan Amounts

The maximum bonding line pre-qualification is $1 million per business. 

Repayment Term

Interest Rates

Fees

The applicant shall pay a premium (in advance) for each bond to be issued by the Director not to exceed two percent of the penal sum of the bond. The premium may be adjusted upward or downward if the contract amount is changed by more than the lesser of 5% or $10,000.00. There is no application fee for application to the Minority Business Bonding Program and there is no fee for bid bonds if the applicant's bid is not successful.

Prepayment

Collateral, Security

The Director will require the personal guarantees against default by the principals and other persons substantially involved in the operation of the business, and other collateral or conditions as is warranted under the circumstances.

Assignment

Participation Requirements

Additional Considerations

• The applicant must demonstrate to the satisfaction of the Director of the Ohio Department of Development (the Director) adequate insurance coverage on its business operation and key employees.

• The applicant must have a line of credit equal to or greater than 20% of the bonded amount or demonstrate to the Director sufficient financial resources to justify a lesser credit facility.

• Once accepted into the program, businesses will be required to provide periodic interim information including (but not limited to) quarterly financial statements prepared by an independent certified public accountant, a license public accountant or a preparer acceptable to the Director to maintain their eligibility.

• The Director, at his discretion, may accept single contract financing in lieu of supplementing the applicants line of credit.

Program Funding Source

How to Apply

Contact the Office of Minority Financial Incentives to discuss the project.

Links to Loan Application and/or Specific Information

http://www.development.ohio.gov/minority/MBBP.htm

Ohio Department of Development
The Office of Minority Financials Incentives
P.O. Box 1001
Columbus, Ohio 43216-1001
614-644-7708
1-800-848-1300

 

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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