Other Programs

Mid Central Community Action, Inc.

Economic Development / Job Creation Small Business Loan Program

(from MCCA's Web site: www.mccainc.org/economicDevelopment.htm)

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Mid Central Community Action is partaking in the Community Service Block Grant (CSBG) Loan to assist in financing small businesses for either start-up or expansion projects. The purpose of this loan program is to create and retain jobs for low-income persons and to promote economic growth in McLean and Livingston Counties.

The CSBG Loan Program is intended to “fill the gap” in conventional financing, not to duplicate the financing of private lenders. The loan program could lend 20 percent to 49 percent of a total loan project at a fixed interest rate of 5 to 7 percent for up to 10 years. The remaining 51 percent to 80 percent of the loan package must be obtained through a local bank (with or without SBA participation) and owner equity.

The Illinois Community Services Block Grant Loan Program is administered jointly by the Illinois Department of Commerce and Economic Opportunity, a statewide network of Community Action Agencies (CAA’s) and Illinois Ventures for Community Action (IVCA). The program provides long-term, fixed-rate financing to new or expanding companies. It links federal, state and private financing by using CSBG funds at low interest in combination with bank funds and equity. By combining bank financing with low interest CSBG loans, the program is able to offer below-market interest rates for up to 10 year terms.

The CSBG Loan Program funds may be used for machinery, equipment, inventory and/or working capital. Funds may not be used for land or building purchases, construction or renovation; those needs would fall under the private lender’s funding.

Potential loan projects must plan to create and maintain one full-time equivalent job for a low-income person or persons for every $20,000 (or part thereof) of CSBG loan funds. The hiring must be completed within the first two years of the loan. The processing of the loan can take from 60-90 days. There is a $20 fee for running the credit reports for CSBG loans, and there is also a 1 percent closing fee.

For further information and/or application forms, please contact:

Small Business Loan Program
Mid Central Community Action, Inc.
923 E. Grove St.

Bloomington, IL 61701
Phone: (309) 829-0691
E-mail: fiscal1@mccainc.org

SOURCE: Mid Central Community Action, Inc. http://www.mccainc.org/economicDevelopment.htm

USDA Business and Industry Guaranteed Loans

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The U.S. Department of Agriculture’s 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. Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate and certain types of debt refinancing. The primary purpose is to create and maintain employment and improve the economic climate in rural communities. This is achieved by expanding the lending capability of private lenders in rural areas, helping them make and service quality loans that provide lasting community benefits. This program represents a true private-public partnership.

B&I loan guarantees can be extended to loans made by recognized commercial or other authorized lenders in rural areas (this includes all areas other than cities of more than 50,000 people and the contiguous and urbanized area of such cities or towns). Generally, authorized lenders include Federal or State chartered banks, credit unions, insurance companies, savings and loan associations, Farm Credit Banks or other Farm Credit System institutions with direct lending authority, a mortgage company that is part of a bank holding company and the National Rural Utilities Finance Corporation.

Assistance under the B&I Guaranteed Loan Program is available to virtually any legally organized entity, including a cooperative, corporation, partnership, trust or other profit or nonprofit entity, Indian tribe or federally recognized tribal group, municipality, county or other political subdivision of a state. Applicants need not have been denied credit elsewhere to apply for this program.

The maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million. A maximum of 10 percent of program funding is available to value-added cooperative organizations for loans above $25 million to a maximum aggregate of $40 million.

The program is administered at the State level by Rural Development State Offices.

For more information regarding this or other USDA programs contact:

Gerald A. Townsend, USDA Business and Community Program Director, at (217) 403-6209.

USDA Revolving Loan Funds and Technical Assistance

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Intermediary Relending Program Loans

USDA Rural Development lends funds to intermediaries, which, in turn, provide loans to finance business facilities and community development projects. Projects must be located in rural areas, which for the purposes of this program, excludes cities with a population of 25,000 or more. Eligible intermediaries include public bodies, nonprofit corporations, Indian tribes, and cooperatives.

Rural Business Enterprise Grant Program

This program offers grants to public bodies, nonprofit corporations, and federally recognized Indian tribal groups to finance and facilitate development of small and emerging businesses located in rural areas.

Grant funds may be used for:

• Acquisition and development of land and the construction of buildings, plants, and equipment, access streets and roads, parking areas and utility and service extensions;
• Revolving loan funds;
• Fees for professional services, technical assistance, etc.

Rural Business Opportunity Grant Program

Under this program, funds are available for technical assistance and planning activities to improve economic conditions in rural areas.

Applicants must be located in rural areas (areas other than cities or towns of more than 50,000 people and the contiguous and adjacent areas of such cities or towns).

Rural Economic Development Loan and Grant Program

Loans and grants under this program are made to Rural Development Utilities Programs-financed telephone and electric borrowers to promote rural economic development and/or job creation projects in non-urban areas. Eligible purposes include, but are not limited to, project feasibility studies, startup costs, incubator projects, and other reasonable expenses. The maximum loan and grant to any eligible recipient is established on an annual basis.

Rural Business Investment Program

The Rural Business Investment Program (RBIP) promotes rural economic development through venture capital investment by for-profit Rural Business Investment Companies (RBICs).

USDA licenses newly formed for-profit entities as RBICs and provides financial assistance to fund their rural area investment activities. Additionally, USDA awards Operational Assistance grants to each RBIC for providing technical assistance to smaller enterprises.

As required in the authorizing statute, USDA has delegated to the Small Business Administration many of the day-to-day responsibilities for the RBIP, including receipt of applications and most of the selection process for licensing as an RBIC. More information about all aspects of the RBIP is available in the regulations authorizing the program, at 7 CFR part 4290.

Renewable Energy and Energy Efficiency Improvement Grants

This program provides grants, loans, and loan guarantees to eligible farmers, ranchers, and rural small businesses to assist in developing renewable energy systems and make energy efficient improvements. Projects provided assistance must be located in a rural area (any area other than cities or towns of greater than 50,000 population and the immediate and adjacent urbanized areas of the cities or towns.

Eligible small businesses include sole proprietorships, partnerships, corporations, and cooperatives organized in accordance with 501c(12) of the Internal Revenue Code. In addition, the applicant must meet the Small Business Administration’s Small Business size standards.

For More Information:

Detail information and applications for financial assistance are available through State and local offices of USDA Rural Development. Some of the authorized programs described above require the implementation of regulations before they are available for funding projects. Consult your USDA Rural Development State Office for information on fund availability.

For more information on USDA Rural Development Business Programs, you may also call the Rural Development National Office at (202) 720-0813 or connect to the Rural Development Web site: http://www.rurdev.usda.gov.

SOURCE: USDA Rural Development Rural Business-Cooperative Programs brochure