Revolving Loan Fund
Through the operation of a Revolving Loan Fund (RLF), Nishnabotna Valley REC is seeking to improve the quality of life in rural areas by contributing to the long-term improvement in the economy. The RLF is a funding source with a goal of providing low interest loans to assist with local economic and community development projects.
Our priorities include job creation and retention, diversification of the local economy, improving the education and skills of the rural workforce, and upgrading the public infrastructure to improve the health, safety, and/or medical care of rural residents. This fund is administered by the NVREC Board of Directors.
Uses of Revolving Loan Fund loan proceeds may be for land, buildings, manufacturing machinery and equipment, office and work equipment or infrastructure improvements. In an effort to promote National energy priorities, energy efficiency upgrades / renewable energy projects at commercial businesses are an eligible purpose for revolved RLF funds.
Application projects must create or retain employment or provide needed community facilities and services such as:
• Industrial/Commercial Development
• Small Business Expansion or Startup
• Business Incubators
• Community Infrastructure
• Community Facilities
• Medical Facilities
• Training/Educational Facilities
• Tourism Projects
Eligible Applicants in the State of Iowa include:
• Limited Liability Companies
• Sole Proprietorships
• Nonprofit Entities
• Governmental Units, including: Local Townships, Municipalities, County Government, Regional Authorities, School Districts, and City or County Hospitals
• Federally-recognized Tribal Authorities
Qualifying projects include community development or community facility projects which correspond to one or more of the following targets:
• Create or save employment; are open to and serve all rural residents; and are owned by the ultimate recipient of funds.
• Business Incubators.
• Facilities and equipment which provide education and training to residents of rural areas which will facilitate economic development.
• Facilities and equipment to provide medical care to residents of rural areas.
• Projects that utilize advanced telecommunications or computer networks to facilitate medical or education services or job training.
• Project feasibility studies and technical assistance.
• Refinancing of existing debt or payment to business owners or partners;
• Projects without any supplemental financing;
• Activities determined to be for investment purposes;
• General improvement loans related to normal replacement needs of a business and unrelated to business expansion/job creation unless related to energy efficiency as stated above;
• Projects that would result in the transfer of existing employment or business activity more than 25 miles from its existing location;
• Agricultural production except where the project is a farmer-owned cooperative or similar, and the agriculture production is part of an integrated business that processes the agriculture products, and the agriculture production portion of the loan will not exceed 50% of the loan amount;
• Projects that are primarily working capital with limited security and/or without other capital purchases as part of the project;
• Construction projects of an individual residential nature;
• Vehicles used for general purposes or that may be considered for personal use;
• Illegal activities, any gambling activities or other activities that in the opinion of the Board of Directors adversely affect RLF interests;
• Projects in which any director, officer, general manager, or supervisory employee of the Intermediary, or close relative thereof, has a financial interest; projects in which any subsidiary or affiliated organization of Intermediary has a financial interest; or projects which, based on the judgment of the Board, would create a conflict of interest, potential for conflict of interest, or any appearance of a conflict of interest.
The Intermediary will work with the potential loan recipient to obtain security that is adequate for the term of the loan. The nature of the collateral pledged shall be determined by the loan committee on a project-by-project basis. If the same collateral is used in joint financing, the RLF will seek a parity position with other lenders. Types of security may include:
• Mortgage Lien on Real Property
• Machinery and equipment which have a developed market;
• Letter(s) of credit from acceptable financial institution(s);
• Securities issued by the Federal government or its agencies.
• Accounts receivable and inventory for short-term loans.
• The loan recipient will be required to maintain fire insurance, and flood insurance if necessary, on secured assets. In some cases, credit life or key man insurance will be required with the RLF as loss payee.
• Personal guarantees from partners, directors or majority stockholders may be required for all corporate or partnership borrowings.
MINIMUM / MAXIMUM LOAN AMOUNTS
The minimum RLF loan will be $15,000 and the maximum allowable RLF Loan will be the total amount of funds available in the RLF. However, the RLF will generally make loans of $150,000 or less.
SUPPLEMENTAL FINANCING REQUIREMENTS
Greater leveraging of outside resources will enhance the approvability of an RLF loan request. At a minimum, RLF projects must include 20% of project funding from other sources.
SPECIAL LOAN LIMITS - RESIDENTIAL HOUSING PROJECTS
Recognizing the link between economic development, workforce availability and housing development and in accordance with USDA program limits, up to 20% of the RLF (an amount equal to the REC “matching funds”) may be used for residential housing projects. Please note, consumer financing of a residence is not permitted.
Interest rates on RLF loans will not exceed the prevailing prime rate as published in the Wall Street Journal on the day of loan closing.
An annual loan servicing fee of up to 1% of the unpaid principal loan balance may be charged for loan administration.
The RLF may charge loan recipients for loan closing costs, attorney’s fees, filing fees, etc., as necessary to complete loan documentation.
The term of an RLF loan shall not exceed 10 years and may be less than 10 years as determined by the REC Board. Loan deferments may be considered on a project-by project basis but are not encouraged.
The Loan Review Committee will make a recommendation concerning the term of the loan and payment frequency (monthly, quarterly, etc.) depending upon project need, the expected life of the security, and the applicant’s ability to repay. The term of the loan will not exceed the expected life of the asset being used as collateral.
While not mandatory requirements, the following maturities will be used as a general
Building _____________ 10 Years
Real Estate ___________ 10 years
Equipment ___________ 2 to 7 Years
Computers ___________ 2 Years
To receive an application for the RLF from Nishnabotna Valley REC or to receive more information about the program and to check availability of funds, contact:
Nishnabotna Valley Rural Electric Cooperative
PO Box 714
Harlan, IA 51537
This institution is an equal opportunity provider and employer.
USDA PROGRAM RECIPIENT Nondiscrimination Statement:
In accordance with Federal civil rights law and U.S. Department of Agriculture (USDA) civil rights regulations and policies, USDA, its Mission Areas, agencies, staff, offices, employees, and institutions participating in or administering USDA programs are prohibited from discriminating based on race, color, national origin, religion, sex, gender identity (including gender expression), sexual orientation, disability, age, marital status, family/parental status, income derived from a public assistance program, political beliefs, or reprisal or retaliation for prior civil rights activity, in any program or activity conducted or funded by USDA (not all bases apply to all programs). Remedies and complaint filing deadlines vary by program or incident.
Program information may be made available in language other than English. Persons with disabilities who require alternative means of communication to obtain program information (e.g., Braille, large print, audiotape , American Sign Language) should contact the responsible Mission Area, agency, or staff office; the USDA TARGET Center at (202)720-2600 (voice and TTY); or the Federal Relay Service at (800) 877-8339.
To file a program discrimination complaint, a complainant should complete a Form, AD-3027, USDA Program Discrimination Complaint Form, which can be obtained online at https://www.ocio.usda.gov/document/ad-3027, from any USDA office, by calling (866) 632-9992, or by writing a letter addressed to USDA. The letter must contain the complainant’s name, address, telephone number, and a written description of the alleged discriminatory action in sufficient detail to inform the Assistant Secretary for Civil Rights (ASCR) about the nature and date of the alleged civil rights violation. The completed AD-3027 form or letter must be submitted to USDA by:
(1) Mail: U.S. Department of Agriculture
Office of the Assistant Secretary for Civil Rights
1400 Independence Avenue, SW
Washington, D.C. 20250-9410; or
(2) Fax: (833) 256-1665 or (202) 690-7442; or
(3) Email: email@example.com