Entrepreneurs often have no choice but to get creative when it comes to financing their new ventures. Recognizing that new ideas are the future of economic growth, the Wisconsin Economic Development Corporation (WEDC) offers lending options targeting the critical stages of new business development. WEDC’s loan funds are tailored to help innovative companies with promising economic futures clear the hurdles associated with bringing new technologies, products and concepts to market.
Companies that provide high-tech or innovative solutions with national or global market potential may be eligible for WEDC Technology Development Loans, which are tailored to the evolving needs businesses face as they move through product/process development, commercial launch and rapid expansion.
Loans typically range between $100,000 and $750,000 and are required to be part of a larger funding round.
Among the criteria WEDC uses to make investment decisions are financial need, private investment leverage, management team experience, the potential to increase production, and the potential for long-term, positive economic impact in Wisconsin.
WEDC will evaluate applications based on factors that include growth potential, timeline, funding, technology, market, execution, cash flow, secondary benefits, need and business impact.
In addition, the following terms apply:
|Use||:||Working capital or equipment financing; loans may not be used for past costs|
|Fee||:||Origination fee of 2.0 percent of the loan amount|
|Interest Rate||:||Fixed rate of 6 percent|
|Repayment||:||The loan shall have a term of up to 7 years with a deferral of principal and interest payments up to 36 months and an option for an additional 12 months of interest-only payments, followed by equal monthly payments of principal and interest.
Loan term will typically range from 5-7 years and will not have a term of more than 10 years. The loan will have regularly scheduled payments of principal and interest with the possibility of balloon payments. Deferral periods or interest-only payments may be granted.
|Collateral||:||General Business Security Agreement or Specific Security Agreement; in cases where WEDC feels it is necessary, assignment of a life insurance policy may be required|
|Guarantor(s)||:||May be required under certain circumstances|
|Match Requirement||:||The borrower must provide a minimum of 4:1 match of private investment funds to TDL loan proceeds.|
|Convertible Notes||:||WEDC may require an ability to convert into an equity position as a condition of the loan.|