PADD Lending Programs Overview
PADD Lending Programs Overview
 
 
       

Thank you for your interest in the government loan programs available for small businesses through the Purchase Area Development District's Business Lending Department. We provide you with access to a variety of loan programs from various agencies. Some loans will be handled in house (through the PADD directly), others are handled externally by the appropriate agency and the PADD will assist you with packaging services to obtain those funds and/or loan guarantees.

If you are not eligible for any of our loan programs, we will help you find financing elsewhere, if possible.
We are looking forward to working with you on your project!

  • United States Department of Agriculture (USDA)

     

     

    USDA Rural Development forges partnerships with rural communities, funding projects that bring housing, community facilities, business guarantees, utilities and other services to rural America. USDA provides technical assistance and financial backing for rural businesses and cooperatives to create quality jobs in rural areas.

     

    Rural Development promotes the President's National Energy Policy and ultimately the nation's energy security by engaging the entrepreneurial spirit of rural America in the development of renewable energy and energy efficiency improvements. Rural Development works with low-income individuals, State, local and Indian tribal governments, as well as private and nonprofit organizations and user-owned cooperatives.

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    • Intermediary Relending Program (IRP)

       

       

      Function:

      The purpose of the Intermediary Relending Program (IRP) is to finance business facilities and community development projects in rural areas. This is achieved through loans made by the Rural Business-Cooperative Service (RBS) to the PADD.   The PADD then re-lends the funds to the ultimate recipients for business facilities or community development.  Loans from intermediaries to ultimate recipients must be for the establishment of new businesses, the expansion of existing businesses, creation of employment opportunities, saving of existing jobs, or community development projects. The maximum IRP loan is generally $150,000.

       

      Customer Types:

      Loans provided to the lumber industry, a funeral chapel, rail line services, tower and sign manufacturing, and other small businesses.

       

       

      Use of Proceeds:  Land, Building, and Equipment

      Payback Period:  Up to 25 years

      Min. Loan Amount/Cost Per Job:  $25,000/job created

      Max. Loan Amount:  $150,000 or 25% of the Project Cost

      Interest Rate:  Tied to Prime Rate

      Eligible Companies:  Start-up or Expanding

       

       

      More Information:

      www.rurdev.usda.gov/rbs/busp/irp.htm

       

       

    • Rural Business Enterprise Grant - Revolving Loan Fund (RBEG-RLF)

       

       

      Function:

      The Rural Business-Cooperative Service (RBS) provided a grant under the Rural Business Enterprise Grants (RBEG) Program to the PADD, who then created a Revolving Loan Fund Program. The RLF allows ultimate recipients to borrow the funds to finance and facilitate development of small and emerging private business enterprises located in any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town.  Grant funds do not go directly to the business. The maximum RBEG-RLF loan is generally $150,000.

       

      Customer Types:

      Loans provided to printing services, specialty food franchises, and automotive body repair shop.

       

       

      Use of Proceeds:  Land, Building, and Equipment

      Payback Period:  Up to 25 years

      Min. Loan Amount/Cost Per Job:  $25,000/job created

      Max. Loan Amount:  $100,000

      Interest Rate:  Tied to Prime Rate

      Eligible Companies:  Start-up or Expanding

       

       

      More Information:

      www.rurdev.usda.gov/rbs/busp/rbeg.htm

       

       

    • Business & Industry Loan Guaranty Program

       

       

      Function:

      The Business and Industry (B&I) Guaranteed Loan Program helps create jobs and stimulates rural economies by providing financial backing for rural businesses. This program provides guarantees up to 80 percent of a loan made by a commercial lender. The primary purpose is to create and maintain employment and to improve the economic climate in rural communities. The maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million.

       

      Customer Type:

      Start-up and existing small businesses, delivered through commercial lending institutions.

       

       

      More Information:

      www.rurdev.usda.gov/rbs/busp/b&i_gar.htm

       

       

    • Rural Economic Development Loans

       

       

      Function:

      Provides zero-interest loans to electric and telephone utilities financed by the Rural Utilities Service (RUS), an agency of the United States Department of Agriculture, to promote sustainable rural economic development and job creation projects.

       

      Customer Types:

      Start-up and existing small businesses; third-party recipients may be private or public organizations having corporate and legal authority to incur debt.

       

       

      More Information:

      www.rurdev.usda.gov/rbs/busp/redg.htm

       

       

  • Economic Development Administration (EDA)

     

     

    A bureau within the U.S. Department of Commerce, EDA's mission is to lead the federal economic development agenda by promoting innovation and competitiveness, preparing American regions for growth and success in the worldwide economy.

       
    • Revolving Loan Fund Program (RLF)

       

       

      Function:

      The purpose of the Revolving Loan Fund Program (RLF) is to finance business startups and expansions and community development projects in rural areas.  The primary purpose is to create and maintain employment and to improve the economic climate in rural communities. The maximum RLF loan is generally $200,000.

       

      Customer Types:

      Loans provided to seed/feed mills, the lumber/woodworking industry, rehabilitation therapists, tool and die manufacturing, signs and screen printing, custom embroidery, and other businesses.

       

       

      Use of Proceeds:  Land, Building, and Equipment

      Payback Period:  Up to 25 years

      Min. Loan Amt./Cost Per Job:  $25,000 per job created

      Max. Loan Amt.:  $200,000 or 25% of the Project Cost

      Interest Rate:  Tied to Prime Rate

      Eligible Companies:  Start-Up or Expanding

       

       

      More Information:

      http://www.eda.gov/AboutEDA/RLF.xml

       

       

  • Small Business Administration (SBA)

     

     

    Small business is America's most powerful engine of opportunity and economic growth. That's where the Small Business Administration (SBA) comes in. SBA offers a variety of programs and support services to help you navigate the issues you face with your initial applications, and resources to help after you open for business.

     

    Financing your business requires research to find the most appropriate funding model. SBA offers a variety of loan programs for very specific purposes.

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    • Certified Development Company 503/504 Loan Program

       

       

      Function:

      Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically, a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a Certified Development Company (CDC) (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower. The maximum SBA debenture generally is $5 million (and up to $5.5 million for manufacturers and certain energy related projects). NEW: Investments in energy efficiency (at least 10% savings) and renewable energies as public policy goals without job requirements! Please click here to go to our designated SBA 504 section for more information and materials.

       

      Customer Types:

      Loans provided to commercial printing services, hotel/motel, convenience stores, resort/marina, veterinary clinic, restaurants, and other businesses.

       

       

      Use of Proceeds:  Land, Building, and Equipment, EE & RE, Limited Refinancing

      Payback Period:  10 to 20 years

      Min. Loan Amount/Cost Per Job:  $65,000

      Max. Loan Amount:  up to $5,500,000 or 40% of the Project Cost

      Interest Rate:  Determined at the Sale of Debentures

      Eligible Companies:  Existing or Expanding

       

       

      More Information:

      www.sba.gov/financing/sbaloan/cdc504.htm

       

       

    • SBA Microloan Program

       

       

      Function:

      Provides short-term loans of up to $50,000 to small businesses and not-for-profit child care centers for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery, and/or equipment. Proceeds cannot be used to pay existing debts or to purchase real estate. The SBA makes or guarantees a loan to an intermediary, who in turn, makes the microloan to the applicant. These organizations also provide management and technical assistance. The loans are not guaranteed by the SBA. The microloan program is available in selected locations in most states.

       

      Customer Types:

      Loans provided to a veterinarian, sawmill, surveyor, rehabilitation services, agricultural services, sign and screen printing services, retail businesses, and other small businesses.

       

       

      Use of Proceeds:  Equipment, Inventory, Working Capital

      Payback Period:  Up to 6 years

      Min. Loan Amount:  $1,000

      Max. Loan Amount:  $50,000

      Interest Rate:  Tied to Prime Rate

      Eligible Companies:  Start-up or Expanding

       

       

      More Information:

      www.sba.gov/financing/sbaloan/microloans.htm

       

       

    • SBA 7(a) Loan Guaranty Program

       

       

      Function:

      Serves as the SBA’s primary business loan program to help qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The SBA 7(a) is also the agency’s most flexible business loan program, since financing under this program can be guaranteed for a variety of general business purposes.  Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation, and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets.

       

      Custoner Types:

      Start-up and existing small businesses, delivered through commercial lending institutions.

       

       

      More Information:

      www.sba.gov/financing/sbaloan/7a.htm

       

       

    • SBA Low-Doc Program

       

       

      Function:

      Once a small business borrower meets the lender's requirements for credit, the lender may request a guaranty from the SBA through SBA LowDoc procedures. This is a quick, two-step process: (1) the borrower completes the front of the SBA's one-page application, and the lender completes the back, and (2) the lender submits a complete application to the SBA and usually receives an answer within 36 hours.  Maximum Low-Doc loan is $150,000 at an 85% guaranty.

       

      Customer Type:

      Start-up and existing small businesses, delivered through commercial lending institutions.

       

       

      More Information:

      www.sba.gov/financing/lendinvest/lowdoc.html

       

       

    • SBA Loan Prequalification

       

       

      Function:

      Allows business applicants to have their loan applications for $250,000 or less analyzed and potentially sanctioned by the SBA before they are taken to lenders for consideration. The program focuses on the applicant’s character, credit, experience, and reliability rather than assets. An SBA-designated intermediary works with the business owner to review and strengthen the loan application. The review is based on key financial ratios, credit and business history, and the loan-request terms. The program is administered by the SBA’s Office of Field Operations and SBA district offices.

       

      Customer Types:

      Start-up and existing small businesses, delivered through commercial lending institutions.

       

       

      More Information:

      www.sba.gov/financing/lendinvest/lowdoc.html

       

       

  • Paducah Area Community Reuse Organziation (PACRO)

     

     

    The Paducah-Area Community Reuse Organization (PACRO) was formed in August of 1997 by regional community representatives from western Kentucky and southern Illinois in an effort to mitigate potential downsizing and restructuring of the Paducah Gaseous Diffusion Plant (PGDP) workforce as a result of the end of the Cold War and changing Department of Energy (DOE) priorities.

     

    Membership of the PACRO is designed to represent the counties in which the majority of the PGDP workforce lives. The PACRO impact area includes McCracken, Ballard, Graves and Marshall Counties in western Kentucky and Massac County in southern Illinois.

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    • PACRO Entrepreneurial Development Program

       

       

      Function:

      The purpose of the PACRO (Paducah-Area Community Reuse Organization) Entrepreneurial Development Loan Program is to finance business facilities and community development projects.  The program targets people associated with the Paducah Gaseous Diffusion Plant (PGDP), whether they are employees or family members of the United States Enrichment Corporation (USEC), subcontractors, or in some other capacity associated with PGDP.  The maximum PACRO Entrepreneurial Loan is generally $100,000.

       

      Customer Types:

      Loans provided to restaurants, a specialty store, an advertising distribution company, and environmental clean-up companies.

       

       

      Use of Proceeds: Capital Assets, equipment, working capital

      Payback Period: Up to 20 years; 7 to 10 years for machinery and equipment; no more than 7 years for working capital; amortized monthly

      Max. Loan Amt.: $100,000.00

      Interest Rate: Tied to Prime Rate (to be determined at time of application)

      Eligible Companies: Start-Up or Expanding

       

       

    • PACRO Industrial Speculative Building Revolving Loan Fund

       

       

      Function:

      The Industrial Parks, Sites, and Speculative Buildings Program invests money in each of the PACRO counties in order to assist in the development of a product marketable to industry. Funds can be used to acquire land, develop infrastructure, or construct speculative buildings. Related to this, PACRO is investing funds in the initial tasks necessary for the creation of a regional industrial park. Additionally, PACRO is providing matching funds to the Regional Industrial Park Marketing Committee in order to assist them in marketing the region to industrial clients.

       

       

      Use of Proceeds: Funds can be used to acquire land, develop infrastructure, or construct speculative buildings

      Payback Period: Up to 10 years term or due upon sale or lease

      Max. Loan Amt.: $750,000.00

      Interest Rate: 0% for implementation phase and first 6 months after completion; converted to below market rate after 6 months

      Eligible Companies: Economic Development Organizations, Municipal Entitites

       

       

  • Tennessee Valley Administration (TVA)

     

     

    The Tennessee Valley Authority, a corporation owned by the U.S. government, provides electricity for 9 million people in parts of seven southeastern states at prices below the national average. TVA, which receives no taxpayer money and makes no profits, also provides flood control, navigation and land management for the Tennessee River system and assists utilities and state and local governments with economic development.

     

    TVA works with local utilities and other strategic partners to promote the economic and social well-being of the people of the Tennessee Valley region by helping to recruit new companies and investments, retain and support existing companies, and prepare communities for economic growth.

     

    Function:

    The TVA program is used to finance business facilities and community development projects.  TVA and its partners support firms and target commercial-sector businesses through strategic partnerships, outreach activities, networks, electronic tools, and business assistance.  The goal of TVA is to ensure the growth and success of the Valley’s business community.

     

    Customer Type:

    Start-up and existing small businesses; third-party recipients may be private or public organizations having corporate and legal authority to incur debt.

 

 

Page last updated on Fri, 17 Jan 2014 16:21:00 GMT.