Montana Automation Loan Program

DEFINITIONS

Capital Investment Justification Report: 

The Capital Investment Justification Report will identify the equipment, the cost of the equipment and identify the resulting annual savings and/or costs. Additionally, the Capital Investment Justification Report will demonstrate the pay-back period and return on investment.

Eligible Applicant:

Eligible applicants are Montana-based manufacturing businesses that are in good standing with the Montana Secretary of State or Tribal Government, and who derive at least 51% of their revenue from the sale of manufactured goods. Businesses must be registered with the Montana Secretary of State for a minimum of one year before applying. Businesses must not be debarred from doing business with the State or federal government.

Manufacturer and\or Manufacturing:

The applicant may qualify as a manufacturer or a manufacturing related business if one or more of the following conditions is met: (i) businesses that transform raw materials or components into products using tools, labor, machinery or chemical processes; (ii) may be involved in manufacturing-relating activities such as packaging or distribution of a product; and\or (iii) business NAICS code specific to manufacturing.

Montana Manufacturing Extension Center: 

MMEC is a statewide manufacturing outreach and assistance center that provides solutions to help Montana manufacturers grow, innovate and enhance their businesses.

PerParticipating Lender: 

Are approved lenders, such as banks or credit unions that must execute a Program Lender Loan Servicing Agreement and adhere to the terms and conditions contained therein. Please contact Program staff to become an approved Participating Lender. A list of all current Participating Lenders may be found here.

ELIGIBLE COSTS AND LOAN REQUIREMENTS

An eligible cost is the purchase and installation of production equipment that will result in a 20% or greater ROI. The financed equipment should be aimed at automating processes and enhancing workflow efficiencies. The ROI is shown through the Capital Investment Justification Report completed by the Montana Manufacturing Extension Center.

Loan Amount:

Commerce will provide up to 50% of the equipment purchase price, which may include shipping costs and incidentals related to the equipment’s operation. Incidentals charged to Commerce’s portion of the loan must be expressly approved by the Program prior to obligating Program funds. The maximum loan amount for Commerce’s portion of the loan is $500,000 per transaction. By extension, an eligible business may apply for up to a total of $1 million in funding over the lifetime of the Program.

Loan Terms:

The terms of the loan should be consistent with the useful life of the equipment and individual project needs. The program allows for a maximum loan term of seven years, with a preference for a five-year payback period. The loan may be amortized up to twenty years. Commerce’s portion of the loan will be provided at 0.00% interest. Loan payments on Commerce’s portion of the loan may be deferred for the first year.

Loan Security:

All Program supported loans must be secured with fixed assets, personal guarantees, or any other reasonable source of available collateral. Collateral may be secured in a subordinated security position to other lender loans.

Loan Servicing:

The approved Participating Lender will service the participated loan and will collect all loan payments. Commerce will provide a servicing fee of $1,500 per loan to the Participating Lender for managing the loan payments.

Loan Application Process

Commerce is the primary point of contact for initiating a loan application and working through the process leading to the loan closing.

The eligible business will submit an application to Commerce. Once the application is received, the businesses Participating Lender is identified, and the business is confirmed good standing, Commerce will contract with MMEC to complete an inspection and assist the business in completing the required Capital Investment Justification Report. After report is received in conjunction with the credit underwriting provided by the Participating Lender, the Commerce Loan Review Committee will complete the review process of the applicant. Thereafter, the eligible business will receive a final determination of funding from the Department via a Commitment Letter. Please contact program staff for guidance and clarification on the application process and funding timeline.

Receipt of an application does not imply a commitment for funding from Commerce.

The Program Loan Review Committee will review the applications for eligibility and suitability with State and program requirements.

Scoring and Ranking

Purchases that show an ROI of more than 30% will have the highest priority. Projects that intend to install the production equipment within six months of application date or sooner will also receive priority.

DEADLINE FOR APPLICATION SUBMITTAL

Applications will be accepted on a first-come, first-served basis until all funds have been obligated.