 |
Business
Finance
City of Longview Revolving Loan Fund
A cooperative effort by the City of Longview and Cowlitz-Wahkiakum
Council of Governments
The City of Longview administers a below-market-rate, variable-term-loan
program to assist new and expanding industrial and commercial businesses.
Here is a summary of program features.
Program Purpose
The purpose of the Revolving Loan Fund (RLF) is to create new jobs,
strengthen the city's and region's economy, encourage development
of the city's Mint Farm Industrial Park and other industrial parks,
and encourage revitalization of downtown Longview.
Program Target Area and Priorities
Projects must be within or immediately adjacent to Longview city
limits. The City Council must approve any loans for firms outside
city limits. The Mint Farm Industrial Park and Downtown are the
primary targeted locations. Loans are for new, start-up businesses
as well as for existing small-to-large firms desiring to expand
or start new product lines.
Use of Funds
Funds are to be used for fixed assets for land, buildings, new construction,
reconstruction, expansion and modernization, and acquisition of
new and/or used equipment. Working capital loans are limited to
30 percent of portfolio (higher if approved by U.S. Economic Development
Administration (EDA)).
Average Size of Loan
Loans can range from $10,000 to $150,000, with an average of $50,000.
Larger loans will be considered on a case-by-case basis.
Required Equity and Private Sector Leveraging
Owners/borrowers must provide a minimum of ten percent of the loan
package in capital, cash, land and/or other fixed equity. The RLF
will provide up to one-third (33.33 percent) with remainder comprised
of private lender resources and borrower equity (at least ten percent).
Collateral
The project must be fully collateralized which can include liens
on fixed assets, inventory, receivables, assignment of patents and
licenses and other assets of the borrower. Personal guarantees may
also be required along with flood and hazard insurance and disclosure
of environmental conditions.
Jobs Created
The project must create and/or retain at least one job per $8,000
to $20,000 of RLF monies invested.
Interest Rates
Interest rates are designed to assist firms with special credit
problems. These loans may involve greater risks and lower interest
rates than conventional financing. The minimum rate will be four
percentage points below current US Treasury rate for loans of similar
size, maturity and purpose.
Loan Terms
- Real estate and buildings: up to 25 years.
- Machinery and equipment: negotiable up to 15 years
- Working capital: up to seven years.
- Balloon payments may be utilized.
- Packaging fees are from zero to four percent and servicing fees
no more than one percent.
- All fees are subject to waiver by the Loan Administration Board.
Program Structure
The city is the loan administrator, with the Loan Administration
Board making the decisions on approving, modifying or denying applications
submitted by staff. The Loan Administration Board is comprised of
seven members: three Longview financial institution representatives,
two City Council representatives, one business /industry representative
and one EDC/downtown redevelopment representative.
Loan payments and fees go to support program administration and
are "revolved" for future loans. The Cowlitz EDC is the
primary marketing entity. The Cowlitz?Wahkiakum Council of Governments
is the grantee for the original $300,000 from the U.S. Economic
Development Administration (EDA) and the City provided a $100,000
local match from a federal Urban Renewal program (early 1980s).
The Cowlitz Economic Development Council and the Community Development
Finance Program is available to help business and industry secure
long-term expansion loans. By combining private financial resources
with federal and state lending assistance and local leadership, this
program focuses on business expansion through community development
activities. Through the loan packaging services offered by the program,
businesses can secure loans that provide
long-term financing, reasonable interest rates, and low down payments;
lenders have a lower credit and collateral risk and more dollars to
lend; and communities can look forward to the creation of jobs and
expanded tax base.
The CEDC uses the resources of community development organizations
such as the U.S. Small Business Administration (SBA) and the U.S.
Department of Housing and Urban Development (HUD), and the Office
of Trade and Economic Development (OTED) Business Finance Unit. The
CEDC will connect finance specialists to work closely with businesses
(new and existing), banks, local economic development councils, governments,
port districts, local revolving funds, and community colleges. The
program's purpose is to identify and assess the feasibility of projects,
to structure financing alternatives, and to prepare loan packages
for the business and for the bank. The program goal is to facilitate
planned economic development, job creation, and job retention.
Program assistance and services may be requested by:
- Any local government in need of community development assistance
- Any successful business wanting to expand and in need
of long-term capital, including:
- Manufacturing
- Service
- Start-up businesses
- Wholesale companies
Loan programs are available for real estate, new construction,
renovation, major leasehold improvements, machinery, equipment,
and working capital. Government financing for a start-up business
is possible but more difficult and requires a larger down payment
by the business.
Decisions are based on criteria such as experience in the type of
business to be financed, evidence of ability to repay the loan,
owners' equity in the business, sufficient collateral, and job impact.
Finance specialists assist with the packaging of loans for
a variety of programs, including:
Please call 360-423-9921 or sprague@cowlitzedc.com with questions.
|
