R.I.V.D.A. RLF LOANS

             "Region IV's Revolving Loan Fund"

Region IV Development's RLF Loan Program was established in 1986 to provide for fixed asset and working capital loans for business expansion and start-up.

Lender Participation: Typically a "Bank" lends up to 50%, RIVDA RLF lends up to 40%, Business injects 10%.  (This is the ideal breakout for an existing, non-specialized business.  If the business is a start-up or has a limited-use facility, then the "business" participation required will be higher.)

Loan Size:   The maximum loan amount is $150,000 from the RLF program.  Typically loaned amounts range from $5,000 - $50,000 for the RLF portion.

Business Eligibility:  Any for-profit business that has had problems getting its loan request fully approved by a local lender.  Usually the lender must be willing to loan for the project contingent upon RLF participation.

Eligible Project Costs:  Land, land improvements, buildings (with some restrictions regarding construction), machinery & equipment, furniture & fixtures, professional fees, contingency, inventory, and working capital.

Project Funding: The project is typically funded by having the "bank" complete their documents for their term loan simultaneously with Region IV completing their documents for the RLF Loan.  The borrower has one payment to the "bank" and one payment to Region IV.

Loan Terms:  The loan can be made for a term of a few months to 15 years depending on the project collateral, and the decision of Loan Committee.

Loan Rates:  The loan rate is determined by Region IV's Loan Committee and is usually based off of either Prime Rate or 5-year Treasury Notes. The final rate is based on many factors determined by the Committee (i.e. collateral, secondary repayment, etc.). The rate can be either fixed or variable.

Owner Occupation:  The project premises must be occupied by the borrower's business to the following minimum extent:  Existing building – 51% and a newly constructed building – 67%.  The balance of the space can be leased on a permanent basis.

Job Creation/Retention Requirement:  The business should create and/or retain one FTE job for every $20,000 loaned by the RLF for the project. This creation and/or retention has a two-year window for fulfillment.

 Have other questions? Go to our Frequently Asked Questions section.