The Revolving Loan Fund (RLF) loan program is the oldest loan fund SCKEDD manages. This program is a locally administered program of the U.S. Economic Development Administration (EDA). Traditionally, the loans that comprise this portfolio involve a higher risk than loans in other SCKEDD programs.
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Your business could be eligible for the RLF Loan Program if it meets the following standards:
- For private enterprises, public and non-profit small business must be located in the 14 county service area.
- Must present loan turndown letters from area lenders.
- Must present a business plan. The quality of plan is tied to the complexity of the project.
- Jobs must be created or retained by the project.
Characteristics of projects financed typically include:
- Financing is available for most business needs; however, restructuring of existing debt is generally not eligible and must be approved by EDA.
- If the project involves construction, Davis-Bacon wage rates must be paid.
- Project can be coupled with other internal SCKEDD loan funds, as well as other lending sources.
- RLF Loans up to $300,000 from an internal revolving loan fund pool.
- Pool of funds is limited.
- Private Enterprises – Fixed interest rate ranging from Prime + 1.5% to Prime + 4.25%, Minimum of 7%.
- Public and Non-Profits – Fixed interest rate ranging from Prime + 1 % to Prime + 4.25%, Minimum of 7%.
- Origination fee of 2% of loan amount with a maximum of $2,000.
- Miscellaneous fees incurred in the process of approval and closing (i.e. credit bureaus inquiries, mortgage filings, U.C.C. searches and filings, appraisals, title work, etc.)
- Principal and interest payment schedule based on the cash flow of the business and use of proceeds.
- Land and Building = 15 years.
- Machinery and Equipment = 7-10 years.
- Inventory and Working Capital = 5-7 years.
- Principal payments may be deferred if projections do not show the ability to pay principal right away.
- Where necessary, interest may be capitalized for a period of time.
- There is no penalty for prepayment of an RLF loan.
- RLF loans are secured by the best collateral position available and can be subordinated.
- Personal guarantees of the owner(s) of the business are required.
- Please note that the overall portfolio must maintain a leverage ratio of 2:1, private to RLF funds. Therefore some loans may be made without a private match, but these are held to a minimum.
For More Information Contact
Christie Henry, Lending Program Manager
9730 E. 50th Street N.
Bel Aire, Kansas 67226