RLF Conference

April 10, 2007

11:15 AM: Track 1: How to Establish an RLF – Sources of Funding

Randy Frescoln Business – Cooperative Program Director USDA Rural Development

Funds established

• Revolving Loan Funds (RLF) are established through three USDA Rural Development Programs

1. Rural Business Enterprise Grant (RBEG)

2. Rural Economic Development Grant (REDG)

3. Intermediary Relending Program (IRP)

Rural Business Enterprise Grant

Established by nonprofit organizations and public bodies

without an established commercial loan portfolio.

– To assist small and emerging private business enterprises.

– RLF size is typically smaller - $50,000 - $70,000

Rural Economic Development Grant

Established by Rural Electric Cooperatives and Rural

Telephone Companies who borrower funds from the

Agency’s Utility Programs.

– To promote rural economic development and job creation projects.

– RLF size is typically $300,000 - $400,000

Intermediary Relending Program

LOAN vs. Grant (1% - 30 years)

– Established by nonprofit and public bodies with lending experience and existing commercial loan portfolio.

– To alleviate poverty and increase economic activity and employment in rural communities.

– RLF size is usually larger > $500,000

In general, all Agency RLFs:

– Include matching funds

– Are administered in accordance with a RLF plan

– Are used to provide gap financing

– Require periodic reports to the Agency

– Require ongoing oversight by the Agency