Loan Programs Small Business Economic Development Loan Program Goal and Objectives To provide private sector employment by financing the start-up and expansion of businesses that will create significant long-term employment. General Requirements Companies must be a small business as defined by the Small Business Administration (SBA). The SBA definition includes thresholds for number of employees, net worth and annual net income. Generally, a business must have fewer than 500 employees, have a net worth under $6 million and have an average net income after federal taxes for the preceding two years less than $2 million to qualify. Loans may be made for working capital, equipment, or other commercial purposes. Loans may not be made to pay costs that were incurred more than 12 months before receipt of the loan application by the Division of Investments. Applicants may be required to supply a turn down letter from a lender listing the reason(s) for denial. If a bank is willing to finance a portion of the project, applicants may be required to supply a letter from the bank explaining the reasons the bank is unable to finance the entire project. Loans may not be made to applicants that have been debarred or suspended from receiving federal benefits. Loans must result in the creation or retention of jobs that would be lost in eligible areas. Provide a copy of each applicant's valid government issued identification at or before loan closing. Eligible Areas Eligibility for the SBED program includes all communities in the state of Alaska with a population of less than 30,000. Loans in communities of 30,000 or more are available on a limited basis, depending on funds availability. Funding Funding is limited. Applicants are encouraged to call and discuss availability of funds prior to submitting a loan application. Terms and Conditions Maximum loan amount is generally $750,000. Interest rate is a fixed rate generally below 6%. Maximum term is generally 20 years for fixed asset loans and generally 5 years for working capital loans. All loans must be adequately secured. The loan amount may not exceed 90% of the value of the collateral offered. A reasonable amount of money from other sources must be committed for use on any project funded through SBED and generally will not be less than 10%. Loans may be in a subordinate position to associated private sector loans. All assets purchased with loan proceeds must be offered as collateral for the loan. Personal guarantees are required of all persons holding 20% or more ownership interest in the business receiving the loan. Payment frequency can be monthly, quarterly, semi-annual or annual. Fees A $250 nonrefundable application fee is due at the time the application is submitted. This fee will be credited toward the origination fee due, if the application is approved. A 1% origination fee ($100 minimum) is due at the time that the loan is closed. Applicants will be responsible for all closing costs. Small Business Economic Development Loan Application The following Small Business Economic Development (SBED) Loan application pages are in PDF format. You will need Adobe Reader in order to view/print them. Acrobat Reader is distributed freely and available for download from Adobe®. Loan Application Extension Application The Division of Investments, Department of Commerce, Community, and Economic Development complies with Title II of the Americans with Disabilities Act of 1990. This publication is available in alternative communication formats upon request. Please contact the Division of Investments at (907)465-2510 or TDD (907)465-5437 to make any necessary arrangements.