Revolving Loan Fund
The Revolving Loan Fund (RLF)
is administered by The Alliance Small Business Development Center (SBDC)
through a partnership with Merced County Community and Economic Development Department following
guidelines set by the Economic Development Administration (EDA) and the Community Development Block Grant program (CDBG). This financial assistance program is available to businesses located within Merced County. Loan amounts range from $ 5,000 - $ 375,000.
The Revolving Loan Fund (RLF) is a gap financing program to supplement Small Business Administration (SBA) loans and private financing. Financing from conventional or private sources will be on a participative basis with private financing having the greater share.
For-profit businesses seeking additional capital for job creating projects may be eligible. Merced County businesses can be organized as an individual proprietorship, partnership, corporation or a cooperative to apply for the RLF.
One permanent job must be created or retained per $10,000 RLF dollars loaned for EDA and $25,000 RLF dollars loaned for CDBG. Business projects involving fewer jobs than required but having a positive economic impact may still be funded. Preference will be given to small businesses that create permanent jobs involving skills related to manufacturing and industrial production service, ag-related businesses, businesses with government procured contracts, and women and minority owned businesses who have received technical assistance from our office.
Use of Loan Funds
- Credit Requirements include:
- Cash flow must be sufficient to service debt;
- Adequate collateral must be pledged to secure the loan;
- Personal guarantees of the owners are required;
- Collateral and security can be shared on a participation loan on a pro-rata basis with the private lender
- Machinery and equipment;
- Construction, including real estate and engineering-related costs;
- Working and start-up capital;
- Land costs; and
- Other costs contributing directly to the project's fixed assets, such as sales and use taxes and interest on interim construction financing.
- Fixed Assets: 10 years maximum;
- Working Capital: 5 years maximum;
- Inventory: 8 years; and
- Equipment: 10 years or 80% of asset's useful life.
Repayment schedules may be adapted to fit individual business circumstances.
Interest is set by the Loan Administration Board below the prevailing rates in the area for loans of similar size, maturity, and purpose.
- 35% of RLF loans to be used for start-ups;
- 65% of all RLF loans are to be used for expansion;
- 100% of RLF loans will be made to small businesses as defined by the USSBA for SBA 504 programs;
- 80% of RLF loans will be made to small manufacturing businesses, 40% to businesses that add value or expand markets for local agricultural products and for service businesses;
- 50% of RLF loans will be for fixed assets; and
- 50% of RLF loans may be for working capital.
Projects from another location that, when moved to Merced County, cause substantial unemploymentat the original location;
Projects that provide only temporary employment;
Projects for which funds are judged to be available otherwise from private lenders; and
Conflict of interest.