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.
Year | Principal Balance | Qualified Guarantee Amount | OneGeorgia Fees |
0 | $225,000 | $112,500 | $1,125 |
1 | $185,219 | $92,609 | $ 463 |
2 | $142,984 | $71,492 | $ 357 |
3 | $ 98,146 | $49,073 | $ 245 |
4 | $ 50,541 | $25,270 | $ 126 |
5 | $ 0 | ||
Total OneGeorgia Fees | $2,316 |
Ga. Comp. R. & Regs. R. 413-6-1-.06
O.C.G.A. Sec. 50-34-1et seq.