Program Purpose
The purpose of the SRDC Revolving Loan Fund (RLF) is to directly loan funds to assist existing retail, service, manufacturing, and distribution businesses with fixed asset and working capital financing. The fund is designed to bridge the gap between owner financing and private lender financing. In today’s economic climate, primary lenders are increasingly seeking ways to decrease risk in their portfolios. This partnership allows the economic engine of our region to keep producing jobs and supporting new business initiatives in a challenging economic environment.
Eligible Applicants
The primary business sectors targeted for these loan proceeds will be agribusiness, retail firms, and service sector. Manufacturing companies will also be considered. Businesses must be located in Cottonwood, Jackson, Lincoln, Lyon, Murray, Nobles, Pipestone, Redwood, or Rock County. They must be “for-profit” business. Priority will be given to businesses in danger of closing, women-owned businesses, or Vietnam-era Veterans.
Minimum Requirements
One full-time equivalent job must be created or retained for every $20,000 of loan proceeds from the RLF. Loan amount can not exceed 50% of total project costs.
Eligible Projects
The primary use of proceeds from the RLF will be for fixed assets and working capital financing.
Maximum Available
Loans may range in size from $5,000 to $100,000 but must be matched by private funding on a 1:1 basis.
Other Funds Required
Applicants must show that they cannot leverage affordable financing from any other means. The RLF must be matched on a 1:1 basis by a private lending source or other non-federal source.
Interest Rate
Interest rate as low as 4%.
Terms
Loan repayment is typically 5 to 7 years for working capital, 7 to 15 years for machinery, equipment, and real estate with shorter balloons.
Collateral Requirements
The RLF will subordinate to private bank financing. Personal guarantees are typically required.
Fees and Other Costs
A 1.5% origination fee for the loan will be required. Closing legal costs will be the responsibility of the Borrower.
Application Time Frame
Applications are accepted on a year-round basis. The Revolving Loan Fund Committee meets monthly or as needed to consider loan requests.
Disbursement of Funds
Upon execution of all required loan documents.
Contact Information
Robin Weis, Economic Development Director
2401 Broadway Avenue, Suite 1
Slayton, Minnesota 56172
Phone: 507-836-1638
Email: robin@swrdc.org