SCIRP&DC

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Business Development Fincancing Programs

• Rural Business Initiative Loan Program
• Community Development Initiative Loans
• Title IX Revolving Loan Program
• Section 504 Loans

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Regional and State Data Links

Community Development Initiative (CDI) Loan Program

Recognizing that direct lending programs represent another tool with which to help implement regional community development objectives and foster the continuation of orderly and efficient growth within the rural five-county region, the Commission established the Community Development Initiative (CDI) direct loan program in January of 1993. The CDI program has proven to be an invaluable means of helping general purpose local governments; special taxing districts and non-profit organization address their project financing requirements..

The Commission's CDI lending authority was made possible by three separate, long-term very low interest, fixed-rate federal loans totaling $3.2 million under the provisions of the Intermediary Relending Program which is administered by the Rural Development division of the USDA. Such federal funds are re-loaned to qualifying, credit worthy local governments, taxing district and non-profit organizations within the region by the Commission at a higher (but nevertheless attractive) fixed interest rate (i.e.,currently ranging from 3.5% to 5.5%) repayable over as long as a 15-year term.

CDI direct loan funds can be used by the borrower to provide up to 75% of the project's total cost (normally in cooperation with the borrower's equity and conventional or other public sector financing) or $350,000 whichever is less. Specifically, CDI loan funds may be used to support public infrastructure or facility improvements which: directly lead to private sector investment and local job creation or retention; the resolution of a serious threat to the health and safety of local residents; and/or minimize the chances for service disruptions or the need for repeated costly repairs.

The Commission's CDI loan funds can also be used by the borrower as a sources for effectively developing the required local matching contribution which would trigger the receipt of additional state or federal funds. Finally, CDI loan funds can also be used to help finance the costs of needed improvements designed to bring the borrower's facility or program into full compliance with applicable state or federal regulations, etc.

To date, the majority of the Commission's CDI loans have been made for $150,000 or less and the regional organization expects not less than a prorated co-first lien position on the assets it helps finance as security for its CDI loan. Most CDI loans can be packaged by the Commission'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 CDI loan could be be ready for closing. A non-refundable packing/processing fee is charged by the Commission to cover its front-end costs of working with the applicant to prepare and review the CDI loan application.

For more detailed information, contact the Commission's Executive Director, Fred Walker at the phone number below or by e-mail at fredwalker47@yahoo.com.