Title IX Revolving Loan Fund Program

Recognizing that direct lending programs represent another tool with which to help implement the Economic Development District's (EDD's) business development objectives and foster the continuation of ongoing public and private partnerships within the rural five-county region, the Commission established the Title IX Revolving Loan Fund direct loan program in April of 1994. Like the agency's other direct loan programs, the Title IX RLF program has proven to be an invaluable means of leveraging substantial sums of private investment which in turn has created significant local employment opportunities for the area's rural residents while building the tax revenue base of the region's local governments.  

Through 2005, the Title IX Program has assisted twenty-two businesses via the investment of $2.2 million in Title IX loan funds in leveraging  total investments of $17.4 million and the creation of more than 675 new jobs.  The Economic Development District's Title IX RLF lending authority was made possible by three capitalization grants (totaling some $900,000) from the US Department of Commerce, Economic Development Administration (EDA).

Such Title IX federal funds are loaned to qualifying, credit worthy industrial or commercial firms within the region by the Economic Development District at an attractive fixed interest rate (i.e.,currently 4.5%) repayable over as long as a 15-year term for real estate investments. Title IX RLF direct loan funds can be used by the borrower to primarily support  fixed asset requirements but can be used to address the borrower's inventory/working capital financing needs as well. This flexible direct loan program can provide up to 25% of the project's total cost (normally in cooperation with the borrower's equity and conventional bank financing) or $150,000 whichever is less.

The majority of the regional organization's Title IX RLF loans have been made for $100,000 and can be used in concert with  the Commission's RBI loan provisions as additional credit sources. The Economic Development District expects that one full time equivalent job will be created (within 24 months) for each $15,000 in Title IX RLF loan funds approved. The EDD further expects not less than a prorated co-first lien position of the assets it helps finance along with the personal guarantee(s) of all major stockholders, partners or investors, etc. as security for its Title IX RLF loan.

Typical Title IX RLF repayment terms are as follows, but can be modified to some extent to meet the borrower's debt repayment capabilities:

• Inventory = 2/3 Years
• Working Capital = 2/3 Years
• Rolling Stock = 2/4 years
• Equipment = 3/10 Years
• Real Estate = 15 Year Maximum

Most Title IX RLF loans can be packaged by the District's staff in two to three weeks with the borrower's full cooperation, thereby permitting a credit decision within a total of four to five weeks. Within an additional two weeks, the Title IX RLF loan could be be ready for closing. A non-refundable packing/processing fee is charged by the Economic Development District to cover its front-end costs of working with the applicant to prepare and review the Title IX RLF loan application.

For more detailed information, contact the Commission's Executive Director, Fred Walker at the phone number above or by e-mail at fwalker@scirpdc.com.

RBI Rural Business Initiative Loan

CDI Community Development Initiative Loan

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