Areas Served: Black Hawk, Bremer, Buchanan, Butler, Chickasaw, and Grundy Counties, Iowa.
The purpose of the Black Hawk Economic Development, Inc. (BHED) Revolving Loan Fund (RLF) Program is to promote new business start up, expansion, and/or retention projects.
In fulfilling its purpose, the organization seeks to foster capital investment, as well as, job creation and retention.
Service Area: The RLF Program service area includes Black Hawk, Bremer, Buchanan, Butler, Chickasaw, and Grundy Counties, all in the State of Iowa.
Eligible Businesses To be eligible for the RLF Program, a business must meet the generally accepted definition of a small business: for profit, independently owned and operated, not dominant in its field of operation, and meet certain employment and/or sales size standards.
RLF Program projects are reviewed on a competitive basis with emphasis on those projects whose primary operation involves manufacturing, commercial services, or wholesaling of commercial goods.
General Requirements A loan applicant must: Be of good character and/or good standing Demonstrate ability to operate the business successfully Possess adequate capital to operate the business on a successful basis Demonstrate sufficient past and/or future earnings to repay the loan Provide adequate business collateral to assure loan repayment Business Assistance Types The RLF Program is a “gap financing” program which emphasizes maximum private sector participation in each project.
The RLF Program offers two types of business assistance: Direct loans are usually made concurrent with a participating loan from the commercial lender.
The RLF loan typically does not exceed twenty five percent (25%) of the total project cost or $50,000, whichever is less.
Loans for fixed assets typically do not exceed five years while working capital loans are typically for three to five years.
Direct loan interest rates are typically at 6%-7% interest and may vary based upon the application and financial need of the applicant.
The Borrower is responsible for the loan closing coSt. Loan guarantees are used to facilitate a direct loan between a small business and a commercial lender.
The amount of the guaranty or guaranteed portion of the loan is based upon the merits of the application and financial need of the applicant.
The Borrower is responsible for a guaranty fee of one to two percent on the guaranteed portion of the loan and associated loan coSt. Eligible Use of Funds – Acquisition of real estate (to include land, building, etc.
) – Building construction or improvement – Purchase of machinery or equipment – Working capital Ineligible Use of Funds – If credit is otherwise available on reasonable terms and conditions – If the loan is to solely pay off a loan to another creditor to reduce its risk – A loan for agricultural or speculative purposes – A loan to an enterprise primarily engaged in lending or investing activities or whose principal income is derived from gambling activities – If the loan encourages monopoly, or is inconsistent with the accepted standards of the free competitive enterprise system – If the loan is used solely to relocate a business from one commuting area to another or inside or outside of a target area Collateral RLF Program loans must be adequately collateralized to assure repayment of the loan.
Personal guaranty(s) generally apply.
Contact InformationBlack Hawk Economic Development, Inc
Address: 3835 W 9th Street
City: Waterloo
State: Iowa
Website:
http://www.bhed.org/revolving-loan-program.htm
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