Business  |  Business Grants, Loans and Tax Credits

Business » Business Grants, Loans and Tax Credits » Regional 166 Direct Loan

Regional 166 Direct Loan

Contact Information

Inquiries:  Contact a Regional 166 Direct Loan Program Administrator

Existing Regional 166 Loan Support Inquiries:
Keena Ridley
Senior Commercial Loan Portfolio Officer
(614) 387-2117

Glenn Van Valkenburgh
Senior Loan Officer
 (614) 387-2117


The Regional 166 Direct Loan Program promotes economic development, business expansion and job creation and or/or job retention by providing low interest loans to businesses who may have limited access to adequate capital from private sources of financing.

The Regional 166 Direct Loan Program utilizes nine local economic development agencies (designated Regional Administrators) to underwrite and help administer the program.  These Regional Administrators are distributed around the State (click here for list), and they are responsible for application collection, review, and initial approvals.  They have robust economic development financing capacity, and possess strong relationships with the local financial institutions, business, and technical assistance communities that target aid to small businesses. 

For Whom

For business registered to do business in the State of Ohio, who wish to finance an eligible project in the State of Ohio.  Eligible projects include those related to industry, commerce, and distribution or research activities. Retail and refinancing projects are ineligible for Regional 166 Direct Loans.

Allowable project costs include:

  • Land and/or building purchase -- if the project involves the purchase of an existing building, the business must occupy at least 51 percent of the premises;
  • Machinery & equipment purchases;
  • Building construction and/or renovation costs – in case of construction, the business must occupy at least 60 percent of the premises;
  • Long-term leasehold improvements;
  • Ongoing fixed asset purchases; and
  • Capitalizable costs directly related to a fixed-asset purchase.

Program Details

The typical Regional 166 Direct Loan project is structured with a financial institution (bank/credit union) financing 50 percent of the project, with the Regional 166 Direct Loan Program loan financing 40 percent of the Project, and the borrower contributing a minimum of 10 percent equity.  (Note: Higher borrower equity contribution percentages may be required based on due diligence.)  The Regional 166 Direct Loan Program may finance up to 75 percent of allowable project costs, provided the 25 percent remainder is funded by the borrower’s equity contribution.  The maximum size of a Regional 166 Direct Loan is $500,000.  Businesses seeking larger loan amounts from a program with similar guidelines should explore the Direct 166 Loan Program here.

The term of the Regional 166 Direct Loan shall be based upon the useful life of the property being financed with the loan proceeds, and should reflect the term of the participating financial institution loan in the project. Loan terms can be up to 20 years for financed real estate, and up to 10 years for financed machinery/equipment.

Interest rates shall be fixed at or below local market rates.

How to apply

  • The business customer or participating financial institution should contact a local Regional 166 Direct Loan Program Administrator, who will perform preliminary investigation of the customer’s financing needs (the project) and their business, to evaluate if the project might be eligible for participation in the Regional 166 Direct Loan Program. 
  • The Regional Administrator and the conventional lender may then work in collaboration with their customer to define the likely financing structure (Sources & Uses) for the project.  The Regional Administrator may assist the business in completing a Regional 166 Direct Loan application.
  • The private lender will proceed with their standard internal credit underwriting, due diligence and loan approval processes, to review/approve their portion of the Project financing and of the structure of the total Project.     
  • The Regional Administrator will proceed concurrently with their credit underwriting, due diligence and loan approval processes. The loan officer and the Regional Agency's Board need to approve the loan.
  • Once approved, the loan package is sent to the Regional 166 Loan Program Manager for review, approval and recommendation. Once reviewed by the Program Manager, the loan package is presented before ODSA’s Loan Review Panel for review/approval. Upon approval, the program manager submits the loan request to the State Controlling Board. (Note: the business may not begin their project until Controlling Board approval).
  • Following Controlling Board approval, the business can proceed with the project, and the Regional Agency will prepare and execute loan documents with the borrower outlining the terms of the loan and the borrower’s repayment obligation.

Additional Program Parameters

Promoting economic development is one of ODSA’s key objectives; and as such, job creation and/or retention are taken into consideration while reviewing proposed loans. Priority may be given to eligible projects with higher wage and job creation commitments in a distressed area of the State.

ODSA generally requires a first and/or a shared first priority mortgage and/or lien position on project costs/uses financed with the Regional 166 Direct Loan proceeds. ODSA may occasionally accept a second lien position on the project collateral, provided that a 1 percent fee is paid to ODSA at loan closing; and provided that collateral coverage, interest rate, and credit risk is deem acceptable.
ODSA may also require the following additional credit enhancements:

  • Personal guaranties from owners with more than 20 percent ownership in the company;
  • Corporate guaranties from related companies;
  • Full or partial letter of credit from a recognized financial institution;
  • Life insurance on key business owners and/or managers; and/or
  • Other types of credit enhancement, if necessary.
  • Initiation Fee: A loan initiation fee in an amount not to exceed $1,000 payable by the borrower to the Regional Agency at the time of application submission;
  • Processing Fee: A processing fee in an amount not to exceed 1.5 percent of the loan amount paid by the borrower to the Regional Agency at the time of loan closing;
  • Servicing Fee: A monthly servicing fee in an amount not to exceed 1/12 of ¼ of 1 percent of the outstanding loan principal; and
  • Reimbursement of Costs: Reimbursement of actual and necessary costs incurred by the Regional Agency with respect to the processing of the loan request.

The Regional Administrator shall also charge and collect an additional 1 percent processing fee from the borrower in case of loans with second collateral positions.

ODSA imposes no pre-payment penalty.