Collateral Support Program 
Tillage Construction, Baton Rouge
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Collateral Support Program

The Collateral Support Program was created to assist small business borrowers having difficulties getting approved for a loan due to a shortfall in collateral. This program establishes pledged cash collateral accounts with participating lenders to enhance the loan collateral coverage for these borrowers. These collateral deposit accounts are established on an individual loan basis with the intent to mitigate a portion of the bank's risk, in turn, providing financial assistance to small business owners on acceptable terms and conditions. This program is available to any Louisiana insured depository institution, insured credit union or CDFI. 

  • Maximum Loan Amount: $1 million
  • Maximum Collateral Support amount: $250,000
  • Minimum Equity Requirement: 10%
  • Quick Turnaround: for qualifying loan amounts

*Please note: SSBCI has been authorized for seven years and is in its early stages. The list of participating providers for each program, and the process for applying, will evolve in the coming months as the program matures. The CSP lender list and application process will be updated as changes occur. To receive email updates about the latest SSBCI news and information, click here and check the SSBCI box. If you have a question for the Louisiana SSBCI team, email [email protected] or call 833.457.0531.


Eligibility

  • Authorized to conduct business in Louisiana and maintains an office in Louisiana
  • 100 employees or less
  • Must create one new permanent job
  • Funding requests for an eligible business purpose that  includes, but is not limited to, start-up costs, working capital, business procurement, franchise fees, equipment, inventory, as well as the purchase, construction, renovation or tenant improvements of an eligible place of business that is not for passive real estate investment purposes. The definition of business purpose excludes activities that relate to acquiring or holding passive investments such as commercial real estate ownership, the purchase of securities; and lobbying activities as defined in Section 3(7) of the Lobbying Disclosure Act of 1995, P.L. 104-65, as amended.

Ineligible businesses and purposes:

  • Restaurants,  grills, cafes, fast food operations, motorized vehicle, trailer, curb-side, sidewalk or street vender food operations that have been in business less than 2 years
  • Bars, saloons and other businesses established for the principal purpose of selling or distributing alcohol
  • Gaming or gambling
  • Pyramid sales
  • Financial services
  • Speculative real estate
  • Owner to owner buyouts
  • Refinancing

Program Rules

All incentive program rules are in the Louisiana Administrative Code maintained by the Office of the State Register.


Application Process

  • Contact a participating lender (see list in tab below) and request a CSP application.

  • Lender submits the borrower's completed CSP application to LEDC.

  • LEDC staff reviews the CSP application and makes recommendation to the appropriate LEDC approval body.

  • After review of the application packet by the appropriate LEDC committee/board, LEDC notifies the lender of the outcome.


Providers

Any insured bank, insured credit union or insured community development financial institution in the State of Louisiana may participate in the SSBCI Collateral Support Program by formally opting in to the program. At this time, no insured bank, insured credit union or insured community development financial institution has been confirmed. LED is actively canvassing to recruit qualified participants into the program. If you have an interest in learning how to be a CSP provider, please email your inquiry to LED at [email protected] Upon completion of the opt-in process, participating lender names, points of contact and website links will be posted here.

●      Participating lenders TBD

Lenders wishing to opt-in to SSBCI’s CSP program may contact LED for more information by emailing [email protected]  or calling 833.457.0531.


FAQs

Q: Can I qualify for the program if I don’t have any collateral?
A: The intent of the CSP is to cover a collateral shortfall, not to be used as the sole source of collateral.

Q: What is the difference between Collateral Support and Loan Guaranty?
A: Collateral Support provides cash to pledge to the loan as additional collateral when a shortfall exists, while a Loan Guaranty provides a guarantee to the lender to assume a portion of the risk in the event of a default.

Q: What types of financing are eligible under the CSP?

  • Lines of Credit
  • Startups
  • Acquisitions
  • Fixed asset purchases
  • Purchase or construction of building (limited to 51% owner occupied)

Q: How do I get a list of participating CSP lenders?
A: See the information in the PROVIDERS dropdown.

Q: What if my current lender is not familiar with the SSBCI CSP?
A: Lenders wishing to opt-in to SSBCI’s CSP program may contact LED for more information by emailing [email protected]  or calling 833.457.0531.

Q: How can I get a loan/grant for my small business?
A: Currently, Louisiana Economic Development does not offer a direct lending program or small business grants. If you are seeking a loan, please contact your local financial institution to apply for a commercial loan.

Q: What are the loan terms?
A: The Interest rates, maturity, collateral and other loan terms are negotiated between the borrower and the lender.

Q: Does the borrower initially contact the bank or lending institution to apply for a guaranty?
A: The borrower is required to contact the bank or lending institution directly to apply. The lender then works directly with LEDC.