The Grow Covington Fund is a unique economic development partnership between the City of Covington and the Grow America Fund, Inc. (GAF).

How Grow Covington Operates

The City and the Grow America Fund have established and capitalized the Grow Covington Fund as an economic development tool designed to assist eligible small businesses within Covington obtain the financing required to grow their businesses. In order to qualify for these loans, a business must be for-profit and meet the size and eligibility criteria of the US Small Business Administration (SBA). Grow Covington will look to finance healthy, successful small businesses that need expansion capital.

Loans made under this program will be underwritten by the Grow America Fund and guaranteed by the SBA under GAF’s Small Business Lending Company License. Therefore, each loan must comply with SBA guidelines and procedures.

GAF staff are well equipped to make the application process simple and seamless.

Once a request for financing is approved, GAF will also close, disburse and service each loan through its maturity.

What does Grow Covington Offer a Borrower?

Grow Covington offers affordable growth capital, on advantageous terms, to borrowers who create jobs and investment in our community.

Loan Amount, Rates and Terms

The Grow Covington Fund can make loans ranging from $65,000 to $5 million as permitted by the US SBA, at or below market rates, for terms up to 25 years, depending on proposed use of funds. The typical structure:

• Working Capital: 3-10 years (normally 5-7 years)
• Machinery and Equipment: 5-10 years, or the life of the asset
• Tenant Improvements: term of the lease
• Acquisition of Real Estate: Up to 25 years
• Construction/Renovations: Up to 25 years of the borrower

Use of Proceeds

Loan proceeds may be used for any legitimate business purposes, including working capital, machinery and equipment, acquisition of land and building, construction, renovations and tenant improvements. Grow Covington, however, does not provide venture capital and cannot provide funds for research and development or to satisfy equity or near-equity needs.

Collateral

All loans must be adequately collateralized. Personal guarantees of the owners are required.

Does Grow Covington Compete with Local Banks and Other Lenders?

No. Grow Covington is meant to complement, not replace, existing sources of financing. Therefore, GAF encourages the borrower’s bank or other lenders to participate in providing a portion of the total financing. Grow Covington always works with existing lenders to structure the best financing available for the borrower.

Finally, as any other lender, the Grow Covington Fund will operate according to prudent lending practices.

Application Process

• Provide a brief description of the project, including proposed sources and uses of funds
• Business Financial Statement or Tax Returns for previous 3 years
• Current Interim Financial Statement (may be an in-house statement)
• A Personal Financial Statement of all principals who own more than 20% of company stock
• A Credit Release, authorizing GAF and the Grow Covington Fund to obtain personal and business credit reports

For additional information or to obtain an application for the Grow Covington Fund, contact the City of Covington Community Development Department at (859) 292-2163.