What is it?
The local jurisdictions are granted state or federal funds to create a Revolving Loan Fund or RLF. The funds are intended to create private sector jobs or to provide services or goods for low and moderate income persons and to diversify and strengthen the economic base. RLF loans are used to fill gaps in financing to businesses that are unable to obtain suitable private sector lending. A letter of denial from a conventional lender is required. The loans are tailored to the capital needs of the individual business. However, these funds are limited and are therefore structured for a scheduled period of time with aa much shorter "call period" than conventional loans. This allows time for the business to become profitable before repaying the loan so the funds can be reloaned or "revolve."

Eligibility Infomation
Eligible applicants include private, for-profit firms, including corporations, partnerships, and sole proprietorship, as well as cooperatives organized for the conduct of business. A borrower is eligible only when credit is not otherwise available on terms and conditions which would permit completion of the project to be financed. The majority of the jobs created or retained by borrowers must be for individuals whose incomes meet the low to moderate income levels per federal and state guidelines.

Loan terms & fees
Maximum loan amount is $150,000
Fixed-rate
Terms tailored to the capital needs of the business, maximum 15 year term
Loan fees - 2% of the amount of the RLF loan

Equity requirements
Generally 10-20% equity is required -- this may be composed of cash, equipment, land, buildings, or other assets to be utilized by the small business

Public benefit requirements
Create or retain one job for every $35,000 borrowed from the RLF
Provide goods or services to residents where at least one low to moderate income person is served per $350 of borrowed funds

Use of funds

• land costs, including engineering, legal, grading, testing, site mapping, and related costs
• building costs, including real estate, engineering, architectual, legal, insurance and related costs
• acquisition of machinery and equipment, furniture and fixtures and leasehold improvements
• working or startup capital
• refinance debt that threatens the stability of the business

How to apply for a loan
Contact the Yuba-Sutter Economic Development Corporation for assistance. The following information will be required to get the process started. If you need help with any of the following, please contact the Small Business Development Center.

1. A current profit and loss statement proforma -- provide a realistic projected cash flow and profit and loss statement for one year (monthly breakdown).
2. A current personal financial statement of the proprietor, or each partner or stock holder owning 20% or more of the corporate stock.
3. Itemized use of proceeds.
4. List collateral with an estimate of current market value and liens against the collateral.
5. A business plan and resumes of the principals.
6. A schedule of business debt, listing accounts receivable and accounts payable.
7. Personal and business tax returns for the past three years.
8. A copy of lease, if property is to be leased.
9. Any contracts or agreements pertinent to the application
10. Submit an RLF Loan Application Package to the Yuba-Sutter Economic Development Corporation.

If you are a small business or microenterprise (less than 5 employees), you should also check out the Microenterprise Training and Loan Program.