FOR IMMEDIATE RELEASE

Contact:

Ohio Department of Development
Maria Smith or Gail Crawley
(614) 466-2609
or
Governor's Office
Joe Andrews
(614) 644-0957

TAFT URGES APPALACHIAN OHIO LENDERS TO PARTICIPATE IN CAPITAL ACCESS PROGRAM

COLUMBUS (October 17, 2002) — Governor Bob Taft today announced the Governor’s Office of Appalachia has partnered with the Ohio Department of Development in urging Appalachian Ohio lenders to participate in the Capital Access Program (CAP).

Since the program’s launch in March 2002, 11 financial institutions have become participating CAP lenders, already assisting 17 Ohio businesses ranging from professional staffing to construction firms. In just seven months, CAP has generated more than $1.4 million in bank loans and has assisted in creating and/or retaining more than 100 jobs.

“The early success of the Capital Access Program is encouraging,” Taft said. “It is important that lending institutions in all areas of our state take part in this program and offer its benefits to entrepreneurs in their respective regions. I strongly encourage lenders in all of Ohio’s 29 Appalachian counties to participate in this innovative loan program.”

Small businesses can apply for CAP loans only through a participating lender. To be eligible for a CAP loan, a small business must meet five basic criteria. The following guidelines are included in the criteria: the business must have less than $10 million in revenue; it must have a significant presence in Ohio; the loan may not be used for passive real estate investing; the loan may not be used for residential housing projects; and job creation or job retention must result from the loan.

The CAP is a low-interest loan program designed to assist small businesses that may not meet conventional underwriting criteria. To accomplish this goal, a unique loan “guarantee” reserve account is established at a participating lender and can be used to recover possible losses from loans enrolled in the program. To enroll loans in the program, a financial institution must contact the Ohio Department of Development (ODOD) and become a participating CAP lender.

The CAP loan can assist small businesses with a wide variety of financing needs. They include the need for start-up capital, lines of credit, equipment purchases, leasehold improvements, building renovations and building acquisitions. Loans cannot exceed $500,000 for fixed assets or $250,000 for working capital. A majority of the existing CAP portfolio has gone to service businesses, most of which have reported less than $100,000 in sales. Twenty-five percent of the businesses received lines of credit, while 75 percent received term loans.

Small businesses and interested lenders may obtain information, program guidelines or enrollment forms by visiting the CAP Web site at www.odod.state.oh.us/cap or by calling the ODOD at (614) 466-5700.

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