Revolving Loan Fund (RLF) & CARES RLF
RLF loans are intended to be gap financing for projects that may not qualify for funding through regular channels. SICOG staff is available to discuss any project prior to completion of the loan application and provide additional guidance. Two RLF’s are currently operating. Both RLF’s are designed to assist eligible businesses with fixed asset acuisition, inventory and working capital needs. Descriptions and related documents are listed below.
SIDG is a non-profit corporation with a board of directors made up of the 13 members of SICOG plus the executive director of SICOG. The purpose of the RLF is to support business activities for which credit is not otherwise available. It is the intent of “the RLF Fund” to work in conjunction with traditional lending institutions to help facilitate a project through gap financing rather than becoming a “primary lender.”
It is not the intent of SIDG to fund a project that is not supported by a primary loan. The SIDG’s RLF provides low-interest loans for business and industry to create or retention jobs. Eligible activities include expansion, retention or start-up projects and RLF funds can be awarded for fixed asset and/or working capital loans. The US Department of Commerce – Economic Development Administration was the initial funding source for this business revolving loan fund; the initial capitalization of the fund was a $400,000 Sudden and Severe Economic Distress Grant.
The purpose of the fund is to promote economic development within the region by providing loans to businesses for fixed asset financing, including land acquisition, building, equipment and inventory. Additionally, the RLF program can make loans for operating capital. All loans are made under the concept of gap financing, which means that SIDG/SICOG is a secondary lender, usually providing less than 10% of a project loan, with the majority of the project funds coming from financial institutions or private investors.
Also, SIDG is assisting local governments in the administration of their local revolving loan funds. Local funds can be coupled with RLF loans for a complete business/industry financial package. As local RLF funds are repaid by business/industry, the proceeds are returned to the local fund to recapitalize it for future loans.
As of December 2018, SIDG has made 87 loans from the Revolving Loan Fund in excess of $6 million and assisted in creating over 3,740 jobs. Loans are for periods up to twenty-five years, and have ranged in values from $20,000 to $250,000. Interest rates are usually at 4%. Applications and complete program details are available at the SICOG office.