How To Finance A Business Expansion Or Relocation In Kansas City, Missouri

How To Finance A Business Expansion Or Relocation In Kansas City, Missouri

In Incentives and Loans, News by EDCKC Staff

One of the main ways the EDC helps entrepreneurs and business owners in Kansas City, Missouri is by helping them secure financing for business expansions and relocations.  Through the EDC Loan Corporation (EDCL), we are able to offer a variety of loans to help your company grow.

SBA 504 Loans

The EDC works with third-party lenders to provide SBA-approved 504 loans. As an SBA-approved Certified Development Company, all our 504 loans are 100% guaranteed by the SBA and can be used for the acquisition of land or buildings, new construction, renovations, or to purchase machinery and equipment.

A typical 504 loan has three sources of funding, with the 504 loan making up 40% of the total project cost while outside lenders provide 50% and the borrower provides 10% as an equity injection. Once you’ve spoken with the EDCL to discuss your project, we can help you find outside lenders who would be happy to work with you to secure outside funding. The 504 loan itself has a low fixed interest rate for 10 or 20 years.

The 504 loans are designed for small businesses with a net worth of less than $15 million, and an average income for the last two years of less than $5 million, making them a perfect fit for startup businesses and small companies looking to expand their operations.

The Revolving Loan Fund

The Revolving Loan Fund (RLF) is a good alternative for small businesses planning to spend less than $500,000 for fixed assets. Typical financing structure is 10% equity, 50% from a commercial bank, and 40%, up to $200,000, outstanding per borrower, from the RLF. The maximum term for the RLF is seven years for equipment and 20 years for real estate. The interest rate can be fixed or variable, and can range up to prime plus 2%, with a floor of 4%. The bank loan is at market interest rate and must have a minimum term of five years, though the amortization period can be extended. The RLF takes a second collateral position and the bank has a first collateral position.

The RLF assists small businesses with expansions which create or retain jobs in Kansas City, Missouri when conventional bank financing is not possible. Because the bank has a first security interest and normally only 50% of the total financing, using the RLF can allow a small business to proceed with an expansion that would not occur otherwise. The U.S. Economic Development Administration provided grant funds for this program.

Neighborhood Commercial Revolving Loan Fund

The Neighborhood Commercial Revolving Loan Fund (NCRLF), a City-initiated and funded program, is designed to assist small businesses in Kansas City, Missouri, with building acquisition and improvement and acquisition of machinery and equipment in neighborhoods in need of revitalization. The City of Kansas City, Missouri, provides CDBG funding for this program through a contract with EDC.

The NCRLF typically assists businesses with financing needs of less than $150,000 for building and/or improvements. A bank provides a loan for 50% of the costs at market interest rate for a term of up to 20 years. The NCRLF provides a loan for 40%, up to $150,000, for a maximum term of 20 years and a fixed interest rate of 5%. As with the RLF, there must be a demonstrated need for this financing. In other words, credit is not available through conventional lenders.

River Market Loan Program

The River Market Loan Program (RMLP) provides financing for fixed assets and/or working capital to businesses located in the River Market /Columbus Park area with boundaries of the Missouri River on the north, Beardsley Road on the west, I-70 on the south and I-35/29 on the east. Click here for a map of the eligible area

The maximum loan per borrower and affiliates is $200,000. The typical structured loan is for the project costs is a 50% bank loan,  owner equity injection of 10%, and the RML for 40%. The loan term is up to 20 years on real estate and up to seven years on equipment and fixtures and five years for working capital. The interest rate is either fixed with a floor of 5% or variable based on WSJ prime+ up to 2%. The RMLP can provide financing without a bank participation and borrower equity requirements can be higher for riskier projects. This program was funded through a grant from a local casino.

Additional Outside Resources

Brownfields Cleanup Revolving Loan Fund

The Brownfields Cleanup Revolving Loan Fund (BCRLF) was established September 24, 2000, by a Cooperative Agreement with the City of Kansas City, Missouri, and is funded by a grant from the U.S. Environmental Protection Agency. Eligible borrowers include owners, prospective purchasers, developers, public/statutory entities, and nonprofit corporations with control or access to a site that requires environmental remediation.

For more information concerning Brownfield assistance, please contact:

Andrew Bracker
Brownfields Coordinator
Department of City Planning and Development
City of KCMO
Tel (816) 513-3002

Chapter 100 Bond Financing

The City of Kansas City can issue taxable bonds to assist with the construction or rehabilitation of eligible commercial facilities. The City takes formal ownership of the business assets and therefore provides property (real and personal) and/or sales tax abatement for up to 10 years.

Industrial Revenue Bonds

A local Chapter 349 Industrial Development Corporation can issue either taxable or tax-exempt bond financing of fixed assets for eligible businesses; however, unlike Chap. 100 bond financing, no property tax abatement is available through the Chapter 349 program. The Missouri Development Finance Board can also issue tax-exempt bond financing for manufacturing and other IRS permitted projects. Additionally, property tax abatement may also be available if the MDFB owns and leases the property to the eligible business.

For Start-ups seeking Microloans

Please Contact Our Partner Resources:

KC BizCare – Kansas City, Missouri’s Business Customer Service
1118 Oak Street, Kansas City, Missouri 64106

KC Sourcelink
4747 Troost, Kansas City, Missouri 64110

UMKC Small Business & Technology Development Center
4747 Troost, Suite 104A, Kansas City, Missouri 64110


Please contact the EDC if you need more information about any of the resources and loans listed on this page!