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Lending Support for Small Businesses Available Through JobsOhio Banking Partnership
On April 21, 2020, Governor DeWine announced a new partnership between JobsOhio, Peoples Bank, and First Federal/Home Savings Bank. Utilizing $50 million committed to the partnership by JobsOhio, the banks will have additional capacity to support existing small business clients during the COVID-19 pandemic.
The partnership will allow banks to provide financing on favorable terms to their local small business clients that would otherwise not have access to credit due to the pandemic. Small businesses in good standing with their bank are eligible for loans to help maintain operations and payroll during the COVID-19 crisis. Loans of up to $200,000 may be used for working capital, including payroll, rent, mortgages or other fixed debts, utilities and other bills.
While there is no official order related to the partnership, the banks have established their own application processes and loan terms. Small business that have been a client of Peoples Bank as of April 1, 2020, can apply online for “The Peoples Bank Advantage Loan” which presents the following terms:
- Peoples Bank business clients with loan(s) or line(s) of credit less than $1 million in good standing as of February 29, 2020, are eligible to get a new loan for up to 20% of their existing Peoples Bank loan(s) or line(s) of credit. This new loan amount cannot exceed $200,000.
- Peoples Bank business deposit only clients (no existing loans) are eligible for a new loan up to 10% of their annual gross revenue, no greater than $100,000.
- 66-month term with interest only payments for the first six months.
- Unsecured loan.
- No origination fee.
Clients of the newly merged First Federal Bank and Home Savings Bank can contact their local branch or banker about the banks’ “JobsOhio Small Business Loan Program.” The terms are as follows:
- For current borrowers, an amount not to exceed the lower of 20% of total existing commitments or maximum of an additional $200,000.
- Deposit only customers with no current loans, amount is lesser of 10% of aggregate annual revenue from sales (most recent 12 month period) or $100,000.
- 35 month term - six months interest only, then 29 principal and interest using 60-month amortization.
- No origination fees.
- Variable rate loan at prime rate, currently 3.25%.
- Standard approval process, collateral and other terms apply.
For questions regarding financing available to small businesses due to the pandemic, please contact one of our business attorneys.
Anna L. Crisp, a law clerk with Eastman & Smith who is finishing her third year at The Ohio State University Moritz College of Law, contributed to this article.
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Disclaimers:
At the date of publication the above information was correct. It is quite possible the information above has changed as COVID-19 is a rapidly evolving situation.
The article in this publication has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.