Revolving Loan Funds are locally controlled sources of capital which may be used to finance start-up and existing businesses whose projects will create permanent jobs. The Revolving Loan Funds are not established to compete with the banking community but to complement it by providing gap financing between what the bank can reasonably lend on a project and what the business can provide in equity. There are general program criteria; however, each commission may vary on certain issues as determined by its board of directors.
Advantages
•Below-market and fixed-rate long-term financing.
Use of Funds
•Land, buildings and equipment.
•Renovation.
•Working capital.
Source of funds
•Revolving loan fund and private lenders.
interest rates
•Normally below prime and can be fixed or variable.
Maturity Term
•Generally more lenient than those normally extended by commercial lenders.
•Requires a participating lender.
Equity Requirement
•Each commission establishes the amount, usually between 5% and 25%.
Eligible Borrowers' Fees
•For-profit industries and businesses.
•Borrower pays all closing costs and fees associated with program.
Job Creation
•Must create or retain jobs.
•Each program determines the amount of revolving loan fund money available for each job created.
RLF application Word Format
RLF Brochure
Source: Alabama Development Office