Headwaters loan programs are meant to improve the economic
vitality of Southwest Montana by encouraging the growth of small businesses.
Headwaters RC&D contributes to the economic development of eight Southwest
Montana counties; including
| |
Microbusiness Loans
|
Intermediary
Relending Program (IRP) |
CDBG/RLF
Loan Program |
EDA/RLF
Loan Program |
| DESCRIPTION |
To improve the economic vitality of Southwest
MT by encouraging the growth of small businesses that will help
diversify and stabilize local economies.
|
Designed
to promote small business enterprises that will hire or retain employees
in rural areas. Eligible borrowers include qualified business or
community development project. |
Stimulate
economic development activity by assisting the private sector to
create/retain jobs for low-to-moderate income (LMI) persons and
to fill a funding gap when alternative sources of public and private
financing are not adequate. |
Stimulate
economic development objectives by strengthening the local economy,
stimulating private investment & enhancing job opportunities.
Fills a funding gap when alternative sources of public/ private
financing are not available. |
| USE
OF FUNDS |
Working Capital; Furniture, Fixtures & Equipment;
Land & Building Purchases; Revolving lines of credit
|
Working
Capital; Furniture, Fixtures & Equipment; Land & Building
purchases; Revolving Lines of Credit |
Working
Capital; Furniture, Fixtures & Equipment; Land & Building
purchases. |
Working
Capital; Furniture, Fixtures & Equipment; Land & Building
purchases. |
| FINANCING
METHODS |
Headwaters RC&D Area, Inc. provides direct
funding of Micro loans. Bank loan guarantees possible in certain
circumstances.
|
Headwaters
RC&D Area, Inc. provides direct funding of IRP loans upon approval
by USDA Rural Development. |
Direct
funding by Headwaters RC&D Area, Inc.; $20,000/Full-time equivalent
job with 51% of jobs available to LMI individuals. |
Direct
funding by Headwaters RC&D Area, Inc.; $10,000/Full-time equivalent
job created/saved. |
| QUALIFICATION |
Small Businesses with fewer than 10 employees,
gross revenues under $500,000 and located within Headwaters 8
county Economic Development District.
|
Applicants
must be located in Headwaters 8 county economic development district
and in unincorporated areas or in a city or town with a population
of 25,000 or less. Butte-Silver Bow qualifies |
CDBG/RLF
loans fill a funding gap when alternative sources of funds are inadequate
or unavailable based on number of full-time equivalent jobs created
or retained. |
EDA/RLF
loans fill a funding gap when alternative sources of funds are inadequate
or unavailable based on number of full-time equivalent jobs created
or retained. |
| LOAN AMOUNTS |
-
$5,000 to $35,000
|
Maximum
loan amount is $150,000 |
Generally
between $50,000 to $100,000 |
Generally
between $10,000 and $100,000 |
| TERM OF
LOAN |
Working Capital: 2-7 years
Equipment: 10 years Maximum (based on life of equipment)
Land/Buildings (Purchase): 10-15 years
Lines of Credit: 1 year
|
Working
Capital: 5-7 years;
Equipment: 10 years maximum
(based on life of equipment)
Land/Buildings: 15-20 years
|
Working
Capital: 5-7 years;
Equipment: 10 years maximum
(based on life of equipment)
Land/Buildings: 15-20 years |
Working
Capital: 5-7 years;
Equipment: 10 Years Maximum
(based on life of equipment)
Land/Buildings: 15-20 years |
| INTEREST
RATE(subject to change) |
Ranges from 3% to 4% over prime rate as published
in the Wall St. Journal, based on risk and fixed at time of loan
approval
|
6%
Interest Rate |
6%
Interest Rate |
6%
Interest Rate |
| FEES (subject
to change) |
Loan Fee: $200 or 1% of the loan amount, whichever
is greater. Loan Loss Reserve Fee: 2% of loan amount
|
Loan
Fee: 2% of loan amount |
Loan
Fee: 1% of loan amount |
Loan
Fee: 1% of loan amount |
| COLLATERAL |
Available Business and Personal Assets
|
Available
Business and Personal Assets |
Available
Business and Personal Assets |
Available
Business and Personal Assets |
| EQUITY &
MATCHING FUNDS REQUIREMENT |
Equity: Case by Case Basis
Matching Funds: None required
|
Equity:
10% Minimum;
Matching Funds: Minimum of 25% of Total Project |
Matching
Funds: 1:1
Maximum of 5:1 Debt-to-Equity |
Matching
Funds: 2:1
Equity Required: 20% |
