Compilation of Rules and Regulations of the State of Georgia
Department 413 - GRANTS OF THE ONEGEORGIA AUTHORITY
Chapter 413-6
Subject 413-6-1 - ENTREPRENEUR AND SMALL BUSINESS DEVELOPMENT
Rule 413-6-1-.06 - Forms, Means of Assistance, Fees and Methodology

(1) Loan Guarantees to Lenders: OneGeorgia will guarantee up to 50% of the original principal amount of the lender's loan, or up to $112,500, whichever is less, with the sub-recipient business providing no less than 10% cash equity in the project. OneGeorgia's loan guarantee will not cover outstanding or capitalized interest charges. Lenders will provide a 1% loan guarantee fee of the guarantee amount to the OneGeorgia Authority at the loan closing. In addition, OneGeorgia will require an on-going annual fee of 0.5% of the outstanding loan balance guaranteed by OneGeorgia. This fee will be collected on an annual basis by the OneGeorgia Authority upon a schedule that shall be described within an approved project's award documents.

(2) Sample Project: Total project cost $250,000

Private cash equity $25,000 (or 10% of $250,000)

Bank loan (5 yr term at 6%) $225,000 (financing need)

The ESBD Loan Guarantee Program will guarantee up to 50% of the $225,000, or $112,500 loan amount ($225,000 multiplied by 50%).

A 1% loan guarantee fee will be paid to the OneGeorgia Authority by the Lender, or $1,125 ($112,500 multiplied by 1%).

On an annual basis, the Lender will remit to the OneGeorgia Authority a 0.5% fee on the outstanding loan guarantee balance. In this example, assuming a straight-line amortization schedule, at the end of year one, that fee will be $463. ($225,000 plus 6% interest, or $12,418 minus an annual debt service payment of $52,199 is equal to a remaining loan balance of $185,219. OneGeorgia will guarantee $92,609, or 50% of the remaining loan balance. The fee is calculated by multiplying remaining guaranteed amount of $92,609 by 0.5%). This is further demonstrated in the table below.