Basic Information on the MCNW Loan Program

Loan Application:
Once all parts of the loan application have been confirmed complete, the review process, including the loan committee meeting, takes 4-6 weeks.  This depends on when the documents were completed, as loan committee meetings are on the last Thursday of each month. There is a $50.00 application fee.

Legal Documents:
Once the loan is approved, the borrower will receive a signed copy of:

  1. Note
  2. Loan agreement
  3. Security agreement
  4. Loan fee invoice
  5. Note amendment (if the terms of the loan change)
  6. Debt subordination agreement (when applicable)
  7. Borrowing resolution (not for sole proprietorships)
  8. Continuing guarantee (when applicable)

Loan Fees:
Fees vary depending on the loan. Standard loan fees typically include: 2% of the loan plus the $10 UCC Filing Fee plus $55 Vehicle Title Fee. Loan fees are collected prior to disbursing loan funds and can be deducted from the loan or paid separately.

Loan Disbursals:
Loan money is always disbursed to a third party (vendor, seller, etc.) and is based on documentation (invoice, bill of sale, receipt, purchase order, etc.) Disbursals may take one week to complete; disbursals not done on Fridays.

Use of Loan Funds:
Use of the loan funds must be pre-approved by Mercy Corps Northwest staff.
Loans amounts vary between $500 and $50,000 with a 12% fixed interest rate, amortized up to 5 years.  Funds cannot be used for:

  • Payment of or refinancing existing debt
  • Business operating deficits
  • Personal income
  • Emergency situations
  • Pre-Startup research and development
  • Speculative property (real estate, stock, collectibles)
  • Non-accredited trainings, seminars, or workshop fees or educational materials

Important Dates:

  • Loan fees due: at signing. They can be deducted from the loan balance or paid separately.
  • Monthly payments begin:  the first full month after loan fund disbursal (start-up businesses potentially have more time).  Payments are due the first day of each month for the duration of the amortization period.
  • Monthly payments end: varies depending on the terms of the loan.
  • Monthly income statements to MCNW: the first day of the following month (to be submitted with the loan payment).
  • Annual income statement to MCNW: within thirty days after the end of the fiscal year for the business.

    • Payments:
    Loan invoice are sent out each month before the end of the month. Payments are due on or before the first of each month. Monthly profit and loss statement forms are mailed out with the invoice and should be filled out and returned with the payment. There is a $25 fee for returned checks.

    Evaluation:
    Mercy Corps Northwest receives funds from the State of Oregon, the City of Portland, and other sources that require us to collect and report on the economic indicators of the businesses.  For this reason, we require our loan clients to provide monthly, quarterly, and annual profit and loss statements for their business. Client feedback is solicited at loan closing and six months after closing.