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Maryland Economic Development Assistance Authority and Fund (MEDAAF)

There are five financing capabilities offered through the Maryland Economic Development Assistance Authority and Fund (MEDAAF), with assistance being provided to the business community and political jurisdictions.  To qualify for assistance from MEDAAF, applicants are restricted to businesses located within a priority funding area and an eligible industry sector. With a few exceptions, assistance cannot exceed 70 percent of the total project costs.

The specific capabilities are:

  • Significant Strategic Economic Development Opportunities:A project that provides eligible industries with a significant economic development opportunity on a statewide or regional level.
    • Assistance is provided to a business in the form of a loan.
    • Maximum assistance cannot exceed the lesser of $10 million or 20 percent of the current fund balance.
  • Local Economic Development Opportunity:A business that provides a valuable economic development opportunity to the jurisdiction in which the business is located and is a priority for the governing body of that jurisdiction.
    • The local jurisdiction must sponsor the business and must participate in the form of a guarantee, a direct loan, or a grant in an amount equal to at least 10 percent of the State's financial assistance.
    • Loans may be up to $5 million, while conditional loans and grants may be up to $2 million.
  • Direct Assistance to Local Jurisdictions or MEDCO:DBED may provide financial assistance to a local jurisdiction for local economic development needs.
    • The total amount of assistance cannot exceed $3 million unless the jurisdiction is a "qualified distressed county."
    • The use of funds includes land acquisition, infrastructure improvements, acquisition of fixed assets, leasehold improvements, up to 70 percent of the cost of a feasibility study and up to 50 percent of the cost of preparing a local economic development plan.
  • Regional or Local Revolving Loan Fund:Grants to local jurisdictions to help capitalize local revolving loan funds.
    • Eligible applicants include a county or regional economic development agency, whether public or private. A jurisdiction may transfer all or a portion of its allocation to a regional revolving loan fund.
    • Each jurisdiction may receive a grant of $250,000 annually.
    • To qualify for a grant, the local government must provide a matching grant of funds to the local revolving loan fund.
  • Special Purposes Loan:This loan targets specific funding initiatives that are deemed critical to the state's economic health and development.
    • The specific program determines the level and type of financial assistance provided.
    • The special purpose initiatives required by the legislature include the Brownfield Revitalization Incentive, Seafood and Aquaculture, Animal Waste, Arts & Entertainment, and Child Care Center programs.
  • Economic Development Opportunities Fund (Sunny Day Fund):This fund promotes Maryland's participation in extraordinary economic development opportunities that provide significant returns to the state through creating and retaining employment as well as the creation of significant capital investments in Priority Funding Areas.
    • Applicants must possess a strong balance sheet and be credit worthy.  Projects must be consistent with the State's strategic economic development plan.
    • Substantial employment, particularly in areas of high unemployment, must be created by the project.
    • Participants must provide a minimum capital investment of at least five times the amount of the Sunny Day assistance.

Maryland Industrial Development Financing Authority (MIDFA)

MIDFA, which is administered by DBED, encourages private sector financing in economic development projects located in Priority Funding Areas. MIDFA facilitates capital access by issuing private activity revenue bonds and can provide credit insurance in the form of a deficiency guaranty to reduce lender’s risk. While the transaction size is generally not limited, the credit enhancement is subject to the applicable program limits.  

Industrial Revenue Bonds  

    • Taxable Bond: Provides access to long-term capital markets for primarily fixed asset financing. 
    • Tax-Exempt Bond: Provides access to long-term capital markets for fixed asset financing at tax-exempt rates. Eligibility is limited by Federal tax law to 501(c)(3) non-profit organizations, manufacturing facilities and certain solid waste projects.  Additional limitations apply to the specific transaction type. 

Credit Insurance  

    • Conventional Program: Insures up to 80 percent, not to exceed $2.5 million of a transaction made by a financial institution.  Export transactions may be insured up to 90 percent.
    • Bond Program: Insures bonds up to 100 percent, not to exceed $7.5 million of taxable or tax-exempt bonds.
    • Linked Deposits: In certain rural areas with qualifying high unemployment, MIDFA can provide a certificate of deposit to the lender as a funding source and pricing incentive to provide below market rate loans to an eligible small business.  The certificate of deposit is not a guaranty or collateral to the loan.


Tri-County Council Revolving Loan Fund

This organization provides loans to new and expanding small to mid-sized businesses. The funds are to be used as gap financing, not to exceed 25% maximum of fixed asset costs or 50% maximum of working capital ($10,000 to 250,000). Maintenance and expansion of job opportunities is a program goal.

Hagerstown Revolving Loan Fund (HRLF) Loans are available for existing or new businesses which will create or retain jobs or improve the economic condition and tax base within the City. Eligible costs include building acquisition, building rehabilitation, machinery and equipment, new construction, professional fees, working capital, and refinance existing debt in special circumstances. HRLF funds are intended to be used as gap financing following efforts to secure conventional financing. Limitations are $30,000 maximum for working capital or professional fee loan and $100,000 maximum for securable assets.

Hagerstown Commercial Rehabilitation Loans

Hagerstown Department of Community Development (CDBG) loans are available to bring a building, or commercial portion of a building, up to code. Eligible projects provide a public benefit, such as enhancements for low-to-moderate income and handicapped persons or blight eradication in locally designated areas.

Small Business Administration 504 Program

Provides expansion loans to for-profit small businesses. Funds are intended to be used for acquisition of land, building, machinery and equipment, construction and renovation which results in the creation of new jobs. Funding provides up to 40% of eligible project costs, with a maximum of $1,500,000. Long-term, below market rate loans are available. There are three criteria for eligibility:

    • The company’s average net income cannot surpass $2.5 million.
    • The anticipated project size must be greater than the personal, non-retirement, unencumbered liquid assets of the guarantors/principals.
    • Net worth of the operating companies must be $7.5 million or less.

Maryland Neighborhood BusinessWorks Maryland Department of Housing and Community Development — Division of Neighborhood Revitalization — The Neighborhood BusinessWorks loan program provides gap financing, i.e. subordinate financing, to new or expanding small businesses and nonprofit organizations in locally designated neighborhood revitalization areas. Financing generally ranges from $25,000 to $500,000. Each project is reviewed for financial need, which may be up to 50 percent of total project costs. Refinancing is not considered part of the project cost.

100 W Washington St., Suite 1401
Hagerstown, MD 21740
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