Loan Terms & Procedures

Loan Terms
  • Maximum Loan Amount: $15,000, subject to the availability of funds
  • Term: 0-10 years, negotiable (Initial loan payments may be deferred for up to 6 months)
  • Interest: Prime rate
  • Collateral/Credit Requirements:
    • The MBLF requires collateral as is deemed necessary to secure the loan (Such security may include real or personal property, income, or other items of value)
    • The MBLF requires instruments of security as it deems necessary (Such security instruments include mortgages, promissory notes, UCC-1 Statements, etc.)
Loan Procedures
  • All applicable municipal, state, and federal permits must be obtained prior to the loan closing.
  • Insurance must be maintained on all collateralized assets. If the business is located in a federal flood zone, the business must have and provide proof of flood insurance. The City of Montpelier must be named as loss payee on all insurance policies.
  • The Loan Committee may impose terms and conditions consistent with the goals of the MBLF.
  • Loan funds will not be disbursed until the borrower has met all conditions of the commitment letter, delivered security instruments, and executed all documents required. Typical loan conditions may include:
    • Books open to Montpelier Business Loan Fund Committee, the Director of Planning and Community Development, and their designees
    • Copies of receipts verifying the use of loan funds as approved by the committee
    • Employment records, as required by the Loan Committee
    • Periodic business inspections
    • Providing monthly financial statements
    • The submission of yearly cash flow projections
  • Prior to closing, Planning and Development staff shall execute a letter of commitment which shall detail closing requirements and other terms and conditions.