The EDA Revolving Loan Fund Program (RLF) is made possible through a capitalization that originally was funded in 1988 providing small businesses within the 13 county area served by SCTDD access to $687,500 in capital. A second investment was made in 1992 adding another $600,000 in capital.
More than $7 million dollars has been loaned to over 83 small businesses since the program’s inception. Total project costs have exceeded $36 million in total investments in the 13 county region leading to the creation or retention of more than 1400 jobs.
Economic Development Administration RLF funds are intended to provide bridge or gap financing for projects that would not otherwise be able to be completed. It can be used in urban or rural areas and may be used in conjunction with other government guaranteed loan programs.
Applicants may be individuals, public or private organizations, or other legal entities, with authority to incur the debt and carry out the purpose of the loan, however, to be eligible to receive loans from the RLF Program, applicants;
- Must be citizens of the United States or reside in the United States after being legally admitted for permanent residence. In the case of an organization, at least 51 percent of the outstanding membership or ownership must be either citizens of the United States or residents of the United States after being legally admitted for permanent residence.
- Must be located in SCTDD’s 13 county service area
- Must be unable to finance the proposed project from its own resources or through commercial credit or other Federal, State, or local programs at reasonable rates and terms. Applicants will be expected to have a ratio of two dollars of non-RLF financing for each dollar of RLF monies requested.
- Applicants must meet the normal credit tests of prudent lending practices-good character, sufficient collateral, sound business plan, and reasonable assurance that the project will generate sufficient cash flow to repay the debt.
**Since the RLF is merely an economic development financing tool to provide gap financing for projects that would not happen otherwise, RLF funds may not be used as a substitution for other sources of financing that may be available. It will be the responsibility of the SCTDD staff to determine if other financing is available for the project before proceeding with an RLF application.
The EDA Revolving Loan Fund Program (RLF)
is available to small businesses with the 13 counties that the SCTDD services. These include: Bedford, Coffee, Franklin, Giles, Hickman, Lawrence, Lewis, Lincoln, Marshall, Maury, Moore, Perry, and Wayne.
The interest rate for each RLF loan will be determined on a case-by-case basis by SCTDD staff subject to approval by the loan review committee. The interest rate will be set at the time of loan approval and will be fixed for the life of the loan. The following criteria will be considered in establishing the interest rate:
- The current prime interest rate quoted in the Wall Street Journal;
- The credit score(s) of the business owner(s);
- The perceived overall degree of risk based on market trends and information obtained during the application process;
- The total amount of collateral available to secure the loan; and
- Any secondary sources of repayment.
In general, loan terms will not exceed the average useful life of the asset(s) being financed. The loan term will be the lesser of the average useful life of the asset(s) being financed or the term based upon the borrower’s ability to pay. Loan terms will generally be limited as follows:
- Working Capital Loans: 3—5 years maximum
- Fixed Asset Loans including Real Property Acquisition: 7—20 years depending upon the asset life and collateral
- Equipment Loans: 3—7 years depending upon the expected useful life of the equipment
Loans from the EDA revolving fund must not exceed $250,000. Funds are subject to availability, however, your project may be pre-approved and funded once the capital becomes available.
For a free consultation to help you decide if this program is right for you and your business, please contact us using the form below.
Director of Economic Development/Special Projects
Economic Development Loan Officer
Following initial review, additional materials may be requested