Rural Business Revolving Loan Fund
Small businesses create the most jobs, but suffer the greatest difficulties in accessing affordable or reasonable financing for business start-up or business expansion resulting in job creation. The Rural Business Revolving Loan Fund (Fund) is designed to improve the Concho Valley geographic area economy by providing "gap" financing for small, emerging private business enterprise that increases employment.
The Rural Business Revolving Loan Fund (Fund) is self-perpetuating through loan repayments by borrowers where the revolving characteristic will allow it to serve as a long term loan source for start-up and expanding business in the future. The Fund is capitalized at $68,600 grant funding provided by the U. S. Department of Agriculture where $53,000 of in-kind contributions were provided from local units of government, economic development entities, chambers of commerce, industrial foundations and businesses (Regional Economic Development Council) in preparation of implementing a Revolving Loan Fund (RLF).
The Concho Valley Workforce Development Board is the federal grant recipient. The Concho Valley Workforce Development Board has delegated loan application and decision to the Regional Economic Development Council Loan Committee.
The Fund is targeted at:
- Manufacturing: transformation of raw materials into finished goods for sale
- Agriculture Related Business: business whose sole function is the provision of services or retail sales of products, agricultural in nature
- Construction: the art, trade or work of building something
- Information Technology: all forms of technology used to create, store, exchange, and use information in its various forms
- Transportation / Warehousing: providing transportation of passengers and cargo, warehousing and storage for goods, scenic and sightseeing transportation, and support activities related to modes of transportation
- Healthcare: The prevention, treatment, and management of illness and the preservation of mental and physical well-being through the services offered by the medical and allied health professions
- Emerging and advanced technologies: providing new technologies and practices resulting in business products and services for market activities
- Arts, Entertainment and Recreation: providing the artistic, creative and technical skills necessary to the production of live events
- Service industries: providing goods or services to others, to repair or maintain or providing advice to those in charge of running a business
Increases in employment result when new business or business expansion creates or saves jobs in the following counties:
- Sterling; and
- Loan Size - at the discretion of the Loan Committee.
- Terms - up to 10 years for land and building; up to 5 years for equipment; and up to 5 years for working capital.
- Interest Rates - determined at the discretion of the Regional Economic Development Council within a range of 4% to 7%. The minimum interest rate is 4%.
- Repayment - Borrower will make monthly payments until the term of the loan has been completely satisfied or payoff has occurred.
- Equity - revolving loan fund participation requires that the borrower shall provide minimum cash equity of 10% of total project cost.
- Delinquency / Default - A loan becomes delinquent or in default when payments are not made in accordance with the terms of the loan agreement. When delinquency occurs, the Council can add late fees to the loan payments. Payments are considered delinquent or in default after 90 days without payment. The Regional Economic Development Council and Concho Valley Workforce Development Board are entitled to all legal means necessary for debt recovery, including, but not limited to, reasonable attorney's fees and court costs. Defaulting on a government funded loan can eliminate future federal financial assistance and will negatively affect your credit rating.
- Environmental Review - required by USDA governing regulations to summarize the environmental impact of land and/or building purchase or improvements to the proposed project.
- Application Processing - The Borrower will supply a current credit report and appraisal of property (copy of tax appraisal from the appropriate Appraisal District). All title searches, lien records, security records, environmental assessments, credit reports, costs of copying and loan closing costs will be paid by the Borrower. If the loan is approved by the Council, a $100 fee is required to cover the administrative expenses for servicing the loan, monitoring special provisions of the loan relating to employment commitments and civil rights.
C. Loan Application
A loan application form for the Rural Business Revolving Loan Fund may be obtained electronically by downloading the RLF Loan Package document (PDF) or at:
Concho Valley Workforce Development Board
36 E. Twohig, Suite 805
San Angelo, TX 76903
Angelo State University - Small Business Development Center
69 N Chadbourne Street
San Angelo, TX 76903
Angelo State University - Small Business Development Center is available to assist businesses in completing their application packet. Applications are reviewed monthly by the Consortium Loan Committee.
Businesses must agree not to show preference or prejudice in hiring practices and must agree not to use funds to relocate the business from one geographic area to another.