Illinois Department of Commerce

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Illinois Department of Commerce Economic
Opportunity (DCEO)

• Stan Luboff
• Capital Programs Manager
• Business Finance Division
• [phone]

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Financing Programs

• Participation Loan Program (PLP)
• PLP Derivatives
• Minority, Women and Disabled PLP
• Development Corporation PLP
• Enterprise Zone PLP

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Participation Loan Program (PLP)To support
small, for profit businesses, operating in
Illinois, focusing on projects that create/retain
substantial employment or modernizations that
improve competitiveness.

• Designed to provide credit enhanced financing in
  the form of subordinated debt.
• 1) Lender executes Master Participation
  Agreement
• 2) Lender reviews individual loan applications,
  applies its own credit standards, and, if
  appropriate, approves the credits, (including the
  pertinent collateral and security matters),
  contingent upon DCEOs participation
• 3) Short and Simple Application Process.
• One Page application by lender with supporting
  
• documentation
• One Page application by borrower

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Participation Loan Program Uses

• Typically utilized for manufacturing/industrial
  projects, involving construction, purchase, or
  renovation of business premises and the
  purchase/installation of machinery/equipment
• May be used for almost any business expense
  except debt refinancing or contingency funding.

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Standard Participation Loan Program TermsLender
determines the rate and fees they wish to charge.

• DCEO participation Up to 25 of the total
  project/up to 50 of Lenders loan, (whichever is
  less), not to exceed 750,000, nor, initially, to
  be less than 10,000
• Lender must retain at least 50 of the loan
• Interest rate on DCEO participation
• - Variable Rate Prime/Prime -1,
  floating, (but not lt 3)
• - Fixed/Adjustable Rate Established at a
  level that produces
• an inducement comparable to DCEOs Variable
  Rate pricing.
• The loan term will generally match the Lenders,
  but may not be longer than 10 years.
• DCEOs position as Creditor is subordinated to
  that of the Lenders

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Minority, Women and Disabled PLP(51-owned, and
daily operations controlled by, one or more
members of the applicable classifications)

• All aspects of the Standard Participation
  Loan Program apply except for the following
• DCEO can participate in these small business
  loans up to 50 of the total project cost, but no
  more than 50 of the Lenders loan.
• DCEO participation Minimum of 10,000/Maximum
  50,000, for a maximum term of 5 years.
• Interest rate on DCEO participation
• - Variable Rate Prime -0.5/-1.5,
  floating, (but not lt 3)
• - Fixed/Adjustable Rate Established at a
  level that produces
• an inducement comparable to DCEOs
  Variable Rate pricing

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Development Corporation PLP

• Established to supplement commercial lenders in
  promoting economic development through
  Development Corporations, (public and
  bank-sponsored/funded entities), that support
  underserved small businesses.
• All aspects of Standard PLP apply EXCEPT
• Fewer industry restrictions
• Interest rate on DCEO participation
• - From the same interest rate
  charged by the Development
• Corporation to the Development Corporations
  rate minus
• 1.0, (but not lt 3)
• Development Corp/DCEO share collateral on a
  pro-rata basis

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Enterprise Zone Financing Program

• Established in order to promote economic
  development within Illinois Enterprise Zones.
• All aspects of Standard PLP apply EXCEPT
• Fewer industry restrictions
• Interest rate on DCEO participation
• - Variable Rate Prime minus 0.5 to
  Prime minus 2.0,
• floating, (but not lt 3)
• - Fixed/Adjustable Rate Established at a
  level that produces
• an inducement comparable to DCEOs
  Variable Rate pricing
• The Zone Administrator must verify that the
  business project is located within the Enterprise
  Zone.