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Regional 166 Direct Loan

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

The Program utilizes seven local economic development agencies ("Regional Administrators") to underwrite and help administer the Program. These Regional Administrators are distributed around the State (see list below), 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, businesses, and technical assistance communities that target aid to small businesses.

Eligible Projects

Eligible projects include those related to industry, commerce and distribution, or research activities.

Note: Refinancing and retail projects (as defined by the Ohio Revised Code Chapter 166) are ineligible.  The Program has been designed to provide financing to established businesses with a minimum of 2-3 years of financial operating history, who may have challenges in obtaining adequate financing required to grow their business and create jobs.  The Program is not designed to provide financing to start-ups; however, the Director reserves the right to consider a waiver of this prohibition in extraordinary circumstances at the request of the Administrator.  The Administrator’s waiver request should be accompanied by documentation supporting a business case that there is a strong management team in place with demonstrated success in running a business of this type, a strong business plan with realistic financial projections based on experienced management’s previous proven successes operating a business of this type, strong guarantor support, strong collateral/security, possible participation in the Project by a commercial lender to share risk, and compelling economic development reasons.

Allowable Project Costs/Uses

  • Land and/or building purchases - 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.

Note: The Program cannot be utilized to finance management buyouts or leveraged buyouts of an existing business.  The Program cannot be used to finance the purchase of company stock or goodwill.  The Program cannot be utilized to buy the fixed assets of a business that is winding down or has recently ceased operations, however the Director reserves the right to consider a waiver of this prohibition in extraordinary circumstances at the request of the Administrator.   The Administrator’s waiver request should be accompanied by documentation supporting a business case that there is: strong collateral coverage (demonstrated by a qualified appraisal), ample Borrower equity and financial strength, strong loan security, evidence that the Program loan is not being used by the failing/failed seller (or related entities) of the fixed asset seller to shed debt/refinance/restructure debt while potentially harming existing shareholders/creditors, and compelling economic development reasons. 

Available Funding

The Program may finance up to 40% of an Eligible Project, with loans up to $1,000,000. The Agency requires a minimum of 10% equity contribution from the borrower in the Eligible Project, however, a greater equity contribution may be required based on due diligence. The remaining Eligible Project shall be funded by the borrower either directly or indirectly through third-party investors and/or private lenders.  Notwithstanding the foregoing, if there is no third-party financing in the Eligible Project, up to 75% of the Eligible Project may be funded by Program loan proceeds with the remainder funded by the borrower’s equity contribution.

Note: The Regional 166 Direct Loans are "take-out" financing (eligible project costs/uses must be purchased with interim financing with the Regional 166 Direct Loan disbursing upon project completion).

Interest Rate & Term

Interest rates shall be fixed at or below local market rates at the time the loan is presented to Development for approval. 

Terms shall be based upon the useful life of the property financed with Program loan proceeds and should typically reflect the term of the third-party financial institution loan in the project, if applicable. The Director reserves the right to consider a discretionary waiver of this requirement at the request of the Administrator.  The Administrator’s waiver request should be accompanied by documentation supporting a business case that the Borrower / Co-borrowers / Guarantors have sufficient financial strength, and/or that other credit enhancements will be employed sufficient to reduce Program loan repayment risks associated with differing loan terms.  The maximum term for real estate (only) loans is up to 20 years and the maximum term for loans to acquire machinery and equipment is up to 10 years.

Job Creation & Retention

Promoting economic development is one of the key Agency objectives, and as such, job creation and/or retention must be taken into consideration while reviewing proposed loans. Priority may be given to Eligible Projects with higher wages and job creation commitments in a distressed area of the State; however, a specific loan dollar/job ratio is not required. The loan agreement will outline the date (metric evaluation date) by which certain commitments, including the job commitments, must be fulfilled.

Security & Collateral

The Agency requires Program loans to have adequate collateral / security and typically requires a first priority mortgage and/or lien position on Project costs/uses financed with the Program proceeds, or an acceptable Intercreditor Agreement providing for shared proceeds. Additional credit enhancements (such as those outlined below) are often employed to ensure that Program loans are adequately secured.

  • Personal guarantees from owners with more than 20% ownership in the company
  • Corporate guarantees from related companies
  • Life insurance on key business owners and/or managers
  • Full or partial letter of credit from a recognized financial institution
  • Other types of credit enhancements, if necessary

If a first or shared-first collateral position is not available, a second collateral position may be taken, provided that the loan is structured to provide adequate collateral/security, perhaps through the use of additional credit enhancements.

Assets offered as collateral may be required to undergo a third-party evaluation (i.e. appraisal) in accordance with these Guidelines & Policies.

Borrowers cannot transfer ownership of any entity without approval from the Agency, even in case of sale of related entities or subsidiaries not pledged as collateral. It is the borrower’s responsibility to inform the Administrator and the Agency before such sale or change in ownership interest is complete.  If the borrower is sold or substantially sells all of its assets, the Program loan must be paid-off as part of the sale. However, the assumption of a loan may be considered on a case-by-case basis and must be approved by Development.

Program Fees

An Administrator may receive such fees, as outlined below, to administer and service the Program:

  • Initiation Fee: A loan initiation fee not to exceed One Thousand Dollars ($1,000.00) payable by the borrower at the time of the application submission.
  • Processing Fee: A processing fee in an amount not to exceed one and one-half percent (1.5%) of the loan amount, paid by the borrower at the time of loan closing for services rendered in the processing of the loan request.
  • Servicing Fee:  A monthly servicing fee in an amount not to exceed one-twelfth (1/12) of one-quarter (1/4) of one (1) percent of the outstanding principal balance of the loan.
  • Reimbursement of Costs:  Reimbursement of actual and necessary costs incurred by the Administrator for the processing of the request for assistance, including, but not limited to, reimbursement for payments to outside consultants and recording and filing fees.


The Program Administrator or Development imposes no pre-payment penalty.

Application Process

  • The business customer or participating financial institution should contact a local Regional 166 Direct Loan Program Administrator who will perform a 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.
  • Applications are accepted by the Program Administrators.
  • Approval by the Regional 166 Direct Loan Program Administrator's Board is required.
  • Once approved by the Program Administrator's Board, approval is required by the Ohio Department of Development's Loan Action Working Group prior to being submitted to the State Controlling Board for final approval.
  • Following Controlling Board approval, the business can proceed with the project and the Program Administrator will prepare and execute loan documents outlining the terms of the loan and repayment obligation.

Regional 166 Direct Loan Agencies

Alloy Development Co., Inc.
1776 Mentor Avenue, Suite 100
Cincinnati, Ohio 45212
(513) 458-2211
Patrick Longo, President/CEO
Jon Main, Vice President - Lending
(513) 458-2232

Anchor Financial Services
(West Central Development Corp.)

915 West Market Street, Suite C
Lima, Ohio 45805
(419) 222-0130
Julie Jurosic, Executive Vice President
& Chief Financial Officer

Cascade Capital Corporation
One Cascade Plaza, 7th Floor
Akron, Ohio 44308
(330) 379-3160 
Robert Filipiak, President & Executive Director (x 231)
Dan Riffle, Senior Loan Officer (x212)
Pat Kleines, Portfolio Manager (x228)

Ohio Mid-Eastern Governments Association
326 Highland Avenue, Suite B
Cambridge, OH 43725
(740) 439-4471
Jeannette M. Wierzbicki, P.E., Executive Director (x204)
George Dolney, RLF Administrator (x203)

Ohio Statewide Development Corporation
1650 Lake Shore Drive, Suite 380
Columbus, Ohio 43204
(614) 481-3214
Michael Kinninger, Executive Director
Kevin Goehring, Loan Officer

Toledo-Lucas County Port Authority
One Maritime Plaza
Toledo, Ohio 43604-1866
(419) 243-8251
Thomas Winston, President & CEO
Jason Bartschy, Director of Financing Programs
Joshua Strickland, Financial Analyst

Valley Economic Development Partners, Inc.
4319 Belmont Avenue
Youngstown, Ohio 44505-1005
(330) 759-3668
Teresa Miller, Executive Director (x116)
Mario A. Nero, Sr., Senior Loan Officer (x122)


Note: Businesses may not proceed with the project until Controlling Board approval.