Revolving Loan Fund

Economic Development

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?

Location

Businesses must be in the following counties: Bailey, Cochran, Crosby, Dickens, Floyd, Garza, Hale, Hockley, King, Lamb, Lynn, Lubbock, Motley, Terry, and Yoakum.

Eligible Use of Funds

Loan funds can only be used for working capital, consolidation of accounts payable, machinery and equipment, and building and land.

Job Criteria

1 job must be created or retained for every $10,000 borrowed from SPAG-RLF. 
All SPAG-RLF loans must pay a 1 point (1%) loan origination fee at the time the loan closes. In addition, the borrower is responsible for paying all attorney’s fees and filing fees associated with the loan.

Terms and Interest Rate

Terms are tied to the useful life of assets pledged as collateral. Interest rates are determined by RLF Board, as low as 4%. The rate is fixed for the life of the loan, with no pre-payment penalty.

Limitations

SPAG-RLF loans cannot be used to refinance existing debt, or for new construction. Borrowers can only request 1/3 of their total project cost at a maximum of $250,000. 

SPAG-RLF Sample Financing Structure

Sample Financing Structure:
1/3 SPAG-RLF Loan
2/3 Match Funds (private lender, equity, other)