What is the Revolving Loan Fund (RLF)?
SPAG established the RLF program in 1987 with a $500,000 grant from the
Economic Development Administration (EDA). Due to the excellent track
record of SPAG, EDA funded an additional $500,000 grant in 1991. The EDA
grants, combined with local matching dollars, give SPAG a total fund of
just over $1,300,000 to loan to private businesses. Due to the closing
of Reese Air Force Base, SPAG was awarded an additional $500,000 in 1997
which served to increase the RLF capital available to businesses in the
region.
What are the requirements to use the RLF funds?
- Businesses must be in the following counties: Bailey, Cochran, Crosby, Dickens, Garza, Floyd, Hale, Hockley, King, Lubbock, Motley, Terry, and Yoakum (click here to view a map of the eligible counties).
- Money can only be used for working capital, consolidation of accounts payable, machinery and equipment, and building and land (exiting loans cannot be refinanced).
- Borrowers can only request 1/3 of their total project cost at a maximum of $200,000.
- Term is tied to the useful life of assets pledged as collateral.
- Rates are determined by the SPAG RLF loan Board. Depending on the strength of the project, the rate could be 4 points below New York Prime.
- 1 job must be created or retained for every $10,000 borrowed from SPAG RLF.
What is the FmHA RLF?
Utilizing grant funds obtained from the Farmers
Home Administration, SPAG established a RLF to assist businesses in rural counties and communities in 1992.
SPAG submitted a grant application to FmHA, now called Rural Development (RD). To date,
5 loans have been funded totaling $530,800. These loans have leveraged $4,519,986
in private sector investment. Traditionally, this program has been used by FmHA to fund
water and sewer projects. SPAG's utilization of this program to establish a rural RLF
earned an Innovation Award from the National Association of Development Organizations
(NADO).