Areas Served: Bell, Clay, Harlan, Jackson, Knox, Laurel, Rockcastle, and Whitley Counties
The CVADD wants to help business grow and provide jobs for area residents.
This focus has lead to the establishment of a revolving Loan Fund through grants from Economic Development Administration and Appalachian Regional Commission.
PURPOSE The Cumberland Valley Area Development District’s primary objective through the establishment of a revolving loan fund has been to assist business start-up and expansion in the industrial, commercial, agricultural and tourism sectors of Bell, Clay, Harlan, Jackson, Knox, Laurel, Rockcastle, and Whitley Counties in Kentucky.
The RLF serves to bridge financing gaps often encountered as businesses seek financing for projects from traditional financial institutions.
ELIGIBLE/INELIGIBLE USES Only businesses with projects located within the eight-county service area of the Cumberland Valley Area Development District (Bell, Clay, Harlan, Jackson, Knox, Laurel, Rockcastle, and Whitley) are eligible for loans from the CVADD-RLF.
Please contact Lesli Gill at 606-864-7391 or lgill@cvadd.
org for more information.
LOAN SIZE Loans will not ordinarily be made in an amount less than $10,000 or greater than $200,000 to any one entity or company.
Generally, the RLF investment will be 33% of the total project coSt. EQUITY REQUIREMENTS The RLF will require a minimum of 10% equity injection to be provided by the borrower.
The equity requirement for a working capital loans can be met if the borrower has existing net working capital of at least 10% of its working capital needs.
MAXIMUM LOAN TERMS The terms of the loans are matched to the use of funds, with long-term financing structured to the productive life of fixed assets.
The terms of maturity of loans will vary depending on the needs of the applicant, but the following maximum repayment terms are generally considered appropriate: · Buildings and Real Estate¦¦¦¦¦¦¦¦.
15 years · Machinery and Equipment¦¦¦¦¦¦¦¦.
10 years · Working Capital¦¦¦¦¦¦¦¦¦¦¦¦¦.
5 years INTEREST RATES The interest rate on RLF loans will generally be at a fixed-rate within the range of five (5) to seven (7) percent.
Interest rate floor will be the lesser of 4% or 75% prime.
Interest on loans will be compounded monthly.
COLLATERAL REQUIREMENTS When an applicant participates with a private lending institution the lending institution will generally hold the first lien with the CVADD taking a second or junior position.
CVADD employs standard collateral requirements; sufficient and appropriate collateral is required for all loans.
Personal guarantees will be required of any person having ownership interest of 20% or more in the business.
CREATION OF JOBS CVADD will require that for every $10,000 in RLF dollars loaned to a borrower, one full-time job will be created or retained.
The one job per $10,000 invested is required for the RLF portfolio as a whole, and not necessarily for each loan project.
Contact InformationCumberland Valley Area Development District
Address: P.O. Box 1740
City: London
State: Kentucky
Website:
http://www.cvadd.org/revolving_loan_program.html
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