Gap Financing for Cost Share Recipients
Q: What is ‘gap’ financing?
A: Gap financing provides the upfront money you need for a project. It is repaid when your cost share or permanent financing comes available. ShadeFund gap financing is structured as a low-interest loan.
Q: How can gap financing help me?
A: Gap financing helps farmers and businesses take advantage of cost-share programs. If you have limited personal financial resources, a ShadeFund loan can provide the funds you need to complete the project. The loan is repaid with the proceeds from the cost share.
Q: What are the terms for the loans?
A: Loans that will be repaid with a cost share can have interest rates as low as 4%. ShadeFund charges upfront:
(a) Origination fee: $200 for loans less than $20,000; 1% of the loan amount for loans greater than $20,000.(b) Any filing fees (usually less than $50). You make principal and interest payments until the ShadeFund loan is repaid through the cost share.
Q: Does ShadeFund lend to farms and businesses that don’t have a cost share?
A: Yes, up to $50,000. ShadeFund loans may have higher interest rates and require additional documentation.
Q: How do I to apply?
1. Register as an Entrepreneur on the ShadeFund website and fill out the ShadeFund application. Or, call Rick Larson at (919) 951-0113 for an application. 2. Submit the ShadeFund application and provide documentation of your cost share. 3. Submit your last three years of tax returns (with all schedules).
Q: How long does the application process take?
A: Once we receive the above information, ShadeFund will decide on your loan application within 30 days. If you’re approved for a loan, ShadeFund can disburse the funds as soon as all loan documents are completed. The entire process can take as little as 30-45 days.