The primary purpose of the Revolving Loan Fund (RLF) Program is to create and/or retain long term, family wage jobs for Skagit County residents by helping local businesses to grow and prosper. Jobs created or retained are calculated on a full-time equivalent basis (2,080 hours per year). The RLF Programs were originally funded by grants from the U.S. Economic Development Administration (EDA) and Community Development Block Grants (CDBG) from the Department of Commerce. The program is called “Revolving” Loan Fund because funds “revolve” from one borrower to another. As loan repayments are paid back into the RLF program, the funds are re-loaned to other businesses. Since 1985 the original grant funds received have been loaned to local businesses approximately four (4) times. The RLF program is structured to meet the financing needs of small business owners and entrepreneurs who are otherwise unable to obtain conventional bank financing.
SCOG manages three RLF Programs for businesses in Skagit County:
Loan Selection Criteria
In general, priority will be given to projects that are expected to:
- Provide long-term family wage jobs.
- Diversify and strengthen the local economy.
- Stimulate private investment.
- Have growth potential.
The following criteria will be used to evaluate loan applications:
- Number and quality of jobs.
- Quality of collateral.
- Ability to repay: character, credit history, financial condition, experience of owners, managers, and key employees, viability of the business, and other relevant factors.
- Compliance with relevant laws and regulations.
What RLF Funds May Be Used For
- Purchase of fixtures, machinery and equipment.
- Acquisition of land and buildings (with restrictions).
- Leasehold improvements, installation of fixed machinery and equipment, and construction; with restrictions (Davis Bacon / Prevailing Wages).
- Working Capital.
What RLF Funds May NOT Be Used For
- Acquisition of an interest in a business.
- Refinance, consolidation, or payment of existing debt.
- Equity required under other Federal loan programs.
- Investment in interest bearing accounts, CDs or any investment program.
- Costs incurred prior to loan approval.
- Real estate speculation of any kind.
- Projects expected to cause unemployment in previous location.
- Projects expected to provide only temporary employment.
- Projects involving generation, transmission or distribution of electrical energy or the production and transmission of gas.
- Mining, media productions, and gambling.
Other Information and Costs
- Application Fee: $300, non-refundable and due with application.
- Loan Origination Fee: 1.5% of total loan amount.
- Interest Rate: Market rate; determined by Loan Committee and SCOG Board.
- Term: Loan terms vary.
- Equity Requirement: 10% to 25% of total project cost.
- Collateral: Deed of Trust, UCC, Vehicle Title, Personal Guarantee, etc.
- Other Costs: Varies; filing fees, title transfer fees, recording fees, etc.
- Location: Must be located in Skagit County; local ownership preferred.
Other Business Development Programs Available
The Economic Development Association of Skagit County (EDASC) provides a variety of business development programs and services free of charge. EDASC staff is available to help prepare the financial and business plans which must be submitted with the RLF loan application. For more information about EDASC, or to contact a Business Advisor, visit www.skagit.org.