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Ohio 166 Direct Loan: Terms, Eligibility and How to Apply
The Regional 166 Direct Loan is an Ohio Department of Development program that makes low-interest loans to established businesses for land, buildings, machinery and equipment in industry, commerce, distribution or research projects. It can finance up to 40% of a project, with loans up to $1 million, and the borrower must put in at least 10% equity.
- $1 millionLoan size: up to $1 million, per the Ohio Department of Development (
- 40%Share of the project: up to 40% of an eligible project, alongside a private lender or other investors.
- 10%Your equity: at least 10% of the project, and the program can ask for more after its review.
- 75%No bank in the deal: if there's no third-party financing, the program can fund up to 75% of the project, with the rest from your equity.
The Regional 166 Direct Loan is a state loan program run by the Ohio Department of Development. It makes low-interest loans to established businesses that may not be able to get enough financing from private lenders, to help them expand and create or keep jobs. It pays for fixed assets like land, buildings, machinery and equipment, and it's handled locally by seven regional economic development agencies around Ohio. The program is still active: the department announced new Regional 166 loans on March 16, 2026.
Last checked: October 28, 2026. This page is general information, not tax, legal, or financial advice.
The short version
| Loan size | up to $1 million, per the Ohio Department of Development. |
|---|---|
| Share of the project | up to 40% of an eligible project, alongside a private lender or other investors. |
| Your equity | at least 10% of the project, and the program can ask for more after its review. |
| No bank in the deal | if there's no third-party financing, the program can fund up to 75% of the project, with the rest from your equity. |
| Rate | fixed at or below local market rates when the loan goes to the department for approval. |
What the loan can pay for
- Buying land or buildings. If you buy an existing building, your business must occupy a majority of it (the program page sets the exact share).
- Machinery and equipment.
- Building construction or renovation. For new construction, your business must occupy a majority of the space.
- Long-term leasehold improvements.
- Ongoing fixed-asset purchases, and capitalizable costs directly tied to a fixed-asset purchase.
It can't be used for:
- Refinancing or retail projects (as defined in Ohio Revised Code Chapter 166).
- Management buyouts or leveraged buyouts of an existing business.
- Buying company stock or goodwill.
- Buying the fixed assets of a business that is winding down or recently closed, except by waiver in extraordinary cases.
Terms and repayment
| Term | based on the useful life of what you finance, and typically matched to the bank loan in the project. The maximum is 20 years for real estate-only loans and 10 years for machinery and equipment. |
|---|---|
| Take-out financing | you buy or build the project with interim financing first. The 166 loan pays out when the project is complete. |
| Collateral | the program typically wants a first-priority mortgage or lien on what it finances (or a shared position through an intercreditor agreement), and often adds personal guarantees from larger owners, corporate guarantees or key-person life insurance. |
| Prepayment | neither the administrator nor the department charges a prepayment penalty. |
| Fees | administrators can charge capped initiation, processing and servicing fees, plus reimbursed costs. The exact caps are on the program page. |
| Ownership changes | you can't transfer ownership without the department's approval, and if the business is sold, the loan generally has to be paid off. |
Who qualifies
- Established businesses with at least 2 to 3 years of financial operating history.
- Projects related to industry, commerce and distribution, or research.
- Start-ups generally don't qualify. The director can consider a waiver only in extraordinary circumstances, with strong management, a strong plan, strong guarantors and collateral, and compelling economic development reasons.
- Job creation or retention is part of the review. Priority may go to projects with higher wages and job creation in a distressed area of Ohio, but there's no required loan-dollars-per-job ratio. Your loan agreement will set dates for meeting job commitments.
How to get it
How to get started
- Contact the Regional 166 administrator for your area. The seven are based in Akron (Cascade Capital Corporation), Cambridge (Ohio Mid-Eastern Governments Association), Cincinnati (Alloy Development Co.), Columbus (Ohio Statewide Development Corporation), Lima (Anchor Financial Services), Toledo (Toledo-Lucas County Port Authority) and Youngstown (Valley Economic Development Partners). Your bank can also make the first call.
- The administrator does a preliminary review of your project and business, then takes your application.
- The administrator's board approves the loan, then the Ohio Department of Development's Loan Action Working Group reviews it.
- The loan goes to Ohio's State Controlling Board for final approval.
- Don't start the project until the Controlling Board approves it. After that, the administrator prepares the loan documents.
Programs that may match
Look beyond the 166 loan
FAQ
FAQ
What is the Ohio 166 Direct Loan?
It's the Regional 166 Direct Loan, an Ohio Department of Development program that makes low-interest loans to established businesses for land, buildings, machinery and equipment, to support expansion and jobs.
How much can I borrow through the Ohio 166 loan?
Up to $1 million, covering up to 40% of an eligible project. If there's no bank or other third-party financing, it can cover up to 75%.
How much equity do I need for a 166 Direct Loan?
At least 10% of the eligible project, and the program can require more based on its review.
Can a start-up get a 166 Direct Loan?
Generally no. The program is designed for businesses with at least 2 to 3 years of financial operating history, and waivers are considered only in extraordinary circumstances.
Where do I apply for the Ohio 166 loan?
Through one of the seven Regional 166 administrators in Akron, Cambridge, Cincinnati, Columbus, Lima, Toledo and Youngstown. The State Controlling Board gives final approval, and you shouldn't start the project before that.