MEDC’s approach is unique in that we share the risk with all participants in a project, lend in partnership with a financial institution, and loan dollars at a higher risk level in order to increase the feasibility of a project.
MEDC not only lends in Milwaukee, but now looks at projects throughout the M7 region, which includes Milwaukee, Waukesha, Ozaukee, Washington, Racine, Kenosha, and Walworth Counties. MEDC provides funds to for-profit businesses for a variety of purposes, such as business acquisition, expansion, equipment, real estate purchases, building and leasehold improvements, and new construction. Our loans range between $50,000 to $750,000.
Typically, our financial institution partner has a first mortgage lien on the project property and equipment for 50% of the total project budget. MEDC provides 40% of the financing in a secondary position. Interest rates are competitive and sometimes below market rates. The borrower must provide 10% of equity to the project.
This model allows our financial institution partner to lower its risk with a lower loan to project value. And the lower 10% equity contribution by the borrower helps preserve precious working capital for the business.
Other MEDC lending considerations
Catalytic project financing ranging from $2.5 million to $15 million
Participation purchases from financial institutions
Investment residential real estate acquisition and improvement financing
Emerging diverse developer investment
Long-term working capital