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How to Apply

Who's Using This Program?

Oregon Administrative Rules

Oregon Revised Statutes (ORS)

Oregon Royalty Fund

The Oregon Royalty Fund (ORF) is an alternate financing solution for projects that are not yet bankable, but are more like angel or venture capital deals. This program allows businesses to pay a monthly royalty payment as a percentage of sales to accommodate growing companies that do not yet qualify for traditional financing.

How it Works

The percentage of sales varies with each project, but targets a 2X return from royalty payments over a 3- to 5-year period. Additional payments may be required in certain scenarios, such as sale of the company or other change in ownership. Once the 2X repayment has been achieved, royalty payments stop and the company has satisfied its repayment obligation.

Requirements

Participants must create or retain jobs and must typically be a traded-sector business.

Loans may be available up to $250,000. Each royalty finance request will be evaluated on a case-by-case basis, but in general the applicant will be required to have:

  • Existing history of sales
  • Potential for rapid growth in sales
  • History of significant gross profit margins or reasonable expectation of achieving a significant gross profit margins
  • Collateral to secure the loan or personal guarantees of major founding owners

Combining ORF financing with funding from other sources is preferred, but not required.

Benefits

Royalty financing provides benefits to Oregon businesses, comparable to traditional debt and equity financing, which may include:

  • Business owner does not dilute ownership interest
  • Royalty financing may be less expensive than equity-based investment
  • Loan payment structure may better align with business cash flow
  • Makes financing available that may not be available from traditional sources of debt or Business Oregon's other business finance programs

How to Apply

  1. Not sure if the program is a fit for your company? Download the Intake Form; or
  2. Download the Application Form, then
  3. Request a secure portal to submit the form and any supplemental documentation.