RCEDA Loan Programs

RCEDA Loan Programs *This Institution is an Equal Opportunity Provider

Revolving Loan Fund

The RCEDA established the Revolving Loan Funds (RLF) to realize key parts of its mission by lending to qualifying businesses for: new purchases or expansion, renovation, machinery and equip-ment, and working capital for existing businesses.

  • Local businesses
  • Economic development: creates or save jobs
  • $50,000 project minimum
  • Interest rates as low as 5%
  • Participation by other lending institution mandatory
  • Must have business plan and financial projections

The RLF usually provides gap financing, the difference between what a business can borrow from a traditional lending institution and what they need to complete their project. These funds are intended to complement conventional business financing techniques by leveraging funding from other federal and state financing programs and private lending institutions.

The RCEDA RLF is usually willing to accept a subordinate position to other lenders. The RCEDA’s Revolving Loan Funds are funded through monies “revolved” from the Montana Department of Commerce Community Development Block Grant (CDBG) program, the USDA Intermediary Relending Program and the Montana Board of Investments.

Selection Criteria

All RLF borrowers are locally-operated, Ravalli County businesses. Priority is given to those businesses which compliment the area’s existing economy by adding value to resources or providing secondary processing and manufacturing of products. A second priority are those businesses with high growth potential, specialty niche market appeal and/or ability to provide permanent sustainable jobs to the area’s unemployed and/or underemployed workers.

Technical Assistance Available

All borrowers must be have a business plan and financial projections, including a cash flow showing that they can pay back the loan and maintain a positive cash flow. Potential borrowers may be required to take the RCEDA’s Building Bitterroot Business basic planning classes in order to provide them with the needed skills.

Application Procedure

Applicants are required to complete an application form and provide such additional information as may be required by RCEDA.

Term of Loans

Maximums: real estate loans 10 years; equipment 7 years; working capital 5 years.

Fees

There is a non-refundable application fee of $250.00 payable to RCEDA. An origination fee of 2% of the loan amount will be deducted from loan proceeds

Credit Report

A credit reports on the business principal is required.

Guarantees

This will be required from company owners, stock-holders, partners or officers with greater than 10% ownership for the full value of RLF loans.

Equity Requirements

All RLF borrowers shall have a debt/equity ratio no greater than 5:1, unless a waiver is granted by the RCEDA Board. (See staff for details). On some Revolving Loan Fund loans, at least 20% owner equity in the entire project cost is required.

Collateral

Collateral can take the form of a real estate mortgage, contract assignment, equipment, machinery, furniture, fixtures, accounts receivable and/or inventory. (See staff for details)

Eligible Use of Funds:

  • Fixed Assets whose useful life is five years or more, including real estate, leasehold improvements, machinery and equipment.
  • Working Capital, including but not limited to inventory & supplies, accounts receivable, wages & operating expenses.

Revolving Loan Fund

The RCEDA established the Revolving Loan Fund (RLF) to realize key parts of its mission by loaning money to qualifying business for: capacity expansion, renovation, machinery and equipment, and working capital.

  • Local businesses
  • Economic development: creates or save jobs
  • $50,000 project minimum
  • Interest rates as low as 5%
  • Participation by other lending institution mandatory
  • Must have business plan and financial projections

The RLF usually provides gap financing, the difference between what a business can borrow from a traditional lending institution and what they need to complete their project. These funds are intended to complement conventional business financing techniques by leveraging funding from other federal and state financing programs and private lending institutions.

The RCEDA RLF is usually willing to accept a subordinate position to other lenders. The RCEDA’s Revolving Loan Funds are funded through monies “revolved” from the Montana Department of Commerce Community Development Block Grant (CDBG) program, the USDA Intermediary Relending Program and the Montana Board of Investments.

Selection Criteria

All RLF borrowers are locally-operated, Ravalli County businesses. Priority is given to those businesses which compliment the area’s existing economy by adding value to resources or providing secondary processing and manufacturing of products. A second priority are those businesses with high growth potential, specialty niche market appeal and/or ability to provide permanent sustainable jobs to the area’s unemployed and/or underemployed workers.

Technical Assistance Available

All borrowers must be have a business plan and financial projections, including a cash flow showing that they can pay back the loan and maintain a positive cash flow. Potential borrowers may be required to take the RCEDA’s Building Bitterroot Business basic planning classes in order to provide them with the needed skills.

Application Procedure

Applicants are required to complete an application form and provide such additional information as may be required by RCEDA.

Term of Loans

Maximums: real estate loans 10 years; equipment 7 years; working capital 5 years.

Fees

There is a non-refundable application fee of $250.00 payable to RCEDA. An origination fee of 2% of the loan amount will be deducted from loan proceeds

Credit Report

A credit reports on the business principal is required.

Micro Loan Programs

The programs were created to provide finance to small and “micro” businesses that need capital but are not bankable for a variety of reasons such as lack of business experience or insufficient collateral. The size of these loan are also difficult for lending institutions. Micro loans can be used for the same purposes as Revolving Loan Fund monies.


Call the RCEDA Office at 406.375.9416 or email RCEDA General Information