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Financing

Commercial banks are a prime source of credit for many small and medium-sized firms. They can provide financing for real estate, equipment and operating capital.

Sources of capital are abundant in the Riverbend region. Funding businesses' capital project needs with private financing sources can be handled separately or jointly. The region has eleven lending institutions with access to combined assets of more than $1.1 billion. Some banks are locally owned and operated, which provides for quick decisions and local handling and processing of documents. Whereas, those that are owned by large holding companies offer substantial lending limits and experience with complex financing structures.

The RiverBend Growth Association, in conjunction with Illinois Department of Commerce and Economic Opportunity, Madison County Community Development and other public agencies, can offer a wide range of economic development financing programs which are designed to help maintain, locate and expand business operation in the Riverbend. These programs can provide low-interest loans and/or loan guarantees at fixed rates. Other incentives are:

  • Tax Increment Financing districts - TIFs- offer redevelopment financing, job training assistance, and infrastructure development
  • Revenue Bonds for certain manufacturing and commercial uses
  • Grants and low interest loans for infrastructure improvements
  • Foreign Trade Zones offer distinct advantages for companies importing and exporting goods
  • Grants and consulting assistance for technology and business development
  • Grants and assistance with employee recruitment and training
  • The Riverbend Enterprise Zone offers these various incentives: property tax abatement, investment tax credits, sales tax exemptions, job tax credits, and utility tax exemption

Private and public financial institutions in the St. Louis metropolitan region offer an array of financial support services to businesses in the bi-state region. The two most common sources of business financing, debt and equity, are available here. However, St. Louis' and the Riverbend's significant economic growth, its pro-business attitude, and its sizeable financial community make these common sources of financing uncommonly beneficial to you. Our banks, savings and loans, and credit unions are acquainted with dealing with the needs of businesses in today's economy. They are accustomed to working with short deadlines, fast track issues and major business financial transactions.

Numerous financial programs are available at the local, state, and federal levels to help your business lower the cost of expanding an existing business or locating a new facility in the Riverbend. In addition, there is an increasing amount of aid available from the private sector for economic development projects.

The Riverbend region offers distinct advantages in financing. While firms may take advantage of the variety of state programs, the Riverbend region has numerous financial assistance options available. More importantly, the Riverbend economic development team is experienced and has an outstanding success rate in putting together a package to suit the individual needs of a firm.

The following is an overview of major financial assistance/incentive programs:

Madison County Community Development Block Grant (CDBG) Economic Development Loan Program

This program provides below-market "gap" financing to expanding or new firms whose projects create permanent jobs for qualified low/moderate income individuals within Madison County. Loans are typically for 10-25 percent of the business' total project costs, up to $100,000. A majority of the jobs created as a result of the business project must be filled by low/moderate income individuals. Loan funds may be used for the purchase of land, buildings, equipment and the construction/renovation of facilities. The loan funds are normally lent at a rate of 3 percent interest for a term of five years. 

Contact is Madison County Community Development at 618-692-8940.

Enterprise Zone Financing Program

The Illinois Enterprise Zone Program was signed into law December 7, 1982. The purpose of the Act is to stimulate economic growth and neighborhood revitalization at the local level. This is accomplished through state and local tax incentives, regulatory relief, and improved governmental services. Key features of the Program are:

  • Financial institutions must enter into a Master Participation Agreement.
  • An eligible loan will be for no less than $10,000, nor more than $750,000.
  • Illinois Department of Commerce and Economic Opportunity's (DCEO) subordinated participation will not exceed 25% of the total project.
  • Ineligible uses of funds are debt refinancing and contingency funding.
  • Eligible businesses are for profit, with less than 500 employees (or not dominant in its field). There are few industry restrictions.
  • DCEO's rate, fixed or variable, will be 200 basis points below the Wall Street Journal Prime, but not less than three percent. The participating financial institution can retain 50 basis points to cover the costs of servicing the loan or it may elect to pass along the 50 basis points to the borrower.
  • DCEO's subordination fee shall be waived.
  • DCEO's term shall match that of the participating bank, unless funds are to be amortized longer than 10 years. An exception may be made for a balloon payment provision.

For further information, contact local Enterprise Zone Administrator at Madison County Community Development at 618-692-8940.

Tax Increment Financing

Tax Increment Financing (TIF) is a method for financing economic development and redevelopment in Illinois municipalities. Tax increments can be used on an annual basis to finance project costs such as land acquisition, site clearance, building rehabilitation, and the construction of public infrastructure. Bonds backed by the incremental revenues may also be used to accomplish these activities.

In the Riverbend region, these communities have TIF districts:

City of Alton Greg Caffey, 618-463-3533
Village of Bethalto Jeff Allsman, 618-377-8051
Village of East Alton Joe Silkwood, 618-259-7714
Village of Godfrey Mike McCormick, 618-466-3324
City of Grafton Rick Eberlin, 618-786-3344
Village of Hartford Jim Hickerson, 618-251-2681
Village of South Roxana Bob Coles, 618-254-7460
City of Wood River Jim Schneider, 618-251-3100

State Treasurer

312-814-1700 or 217-782-6540
www.treasurer.il.gov/#

Illinois Department of Commerce and Economic Opportunity

Grants & Loan Programs
http://www.illinois.gov/dceo/SmallBizAssistance/Financing/Pages/default.aspx

Small Business Administration
www.sba.gov/financing/index.html

USDA Rural Development
www.rurdev.usda.gov/ILhome.html

Illinois Finance Authority
www.il-fa.com
Illinois Finance Authority acts as the state's investment banker, with an affordable product line of revenue bonds, business loans, local government bonds, not for profit bonds and venture capital.

Overseas Private Investment Corporation (OPIC)
www.opic.gov
OPIC's core mission is to support economic development by promoting U.S. private investment in developing countries and transition economies. In support of that mission, OPIC evaluates all projects it may support for their contribution to development in 25 areas, and measures the organization's performance on the basis of the contribution of projects OPIC supports to development.

Export-Import bank of the United States
www.exim.gov
The Export-Import Bank supports the financing of U.S. goods and services, turning export opportunities into real transactions, maintaining and creating more U.S. jobs. We assume credit and country risks the private sector is unable or unwilling to accept.