Business Lending Programs at SETDD

Revolving Loan Fund
Did you know that the Southeast Tennessee Development District provides loans to businesses in the region?

Since 1986, SETDD has operated a Revolving Loan Fund (RLF) through the U.S. Economic Development Administration and has provided 152 loans totaling $9,267,152. This investment has created or retained 4,059 jobs and generated a capital investment of $54.8 million in the Greater Chattanooga region.

The RLF provides up to $150,000 to purchase equipment, real estate or other fixed assets to qualifying businesses.

Loans are amortized on a monthly basis up to 15 years. Interest rates are fixed for the life of the loan generally at or near the published Prime rate at the time of closing, but not less than 4 percent.

Requirements

• For each dollar of financing invested in a project that a minimum of $2 of private investment is matched.
• For each $35,000 of RLF funds borrowed through the Economic Development Agency, one new job must be created or retained.
• Proof is required to show that RLF financing is not replacing financing available under normal commercial terms
• May require up to 10 percent equity injection by the owner of the busines

Required Collateral

• Deed of trust and/or security interest in assets of project generally in a pro-rata or subordinate position to private lender. Personal guarantees always required.

RLF loans are available in Bledsoe, Bradley, Grundy, Hamilton, Marion, McMinn, Meigs, Polk, Rhea, and Sequatchie Counties in Tennessee and Dade and Walker Counties in Georgia.

If you are interested in learning more about the Revolving Loan Fund, click here to download information or contact Audra Kelly at akelly@sedev.org or 423-424-4267.

Intermediary Relending Program
Funded through the U.S. Department of Agriculture’s Rural Development office, the Intermediary Relending Program (IRP) is a new fund that that the Southeast Tennessee Development District began offering in 2011. This fund provides an additional $750,000 to SETDD to assist regional businesses and industries.

The IRP provides loans up to $150,000 to purchase equipment, real estate or other fixed assets (permanent working capital).

Loans are amortized on a monthly basis up to 15 years. Interest rates are fixed for the life of the loan generally at or near the published Prime rate at the time of closing, but not less than 5 percent.

Requirements

• Maximum IRP participation is 75 percent of the total eligible  project cost. IRP allows the borrower to partner with other lending programs.
• One new job must be created or retained for each $35,000 of IRP funds.
• Requires a $250 application fee by the borrower.
• Priorities are given to projects that hire individuals with low-to moderate income levels or farm-family employees.
• May require up to 10 percent equity injection by the owner.

IRP loans are available in Bledsoe Bradley (excluding Cleveland), Grundy, Hamilton (excluding Chattanooga), Marion, McMinn, Meigs, Polk, Rhea, and Sequatchie Counties in Tennessee and Dad, Catoosa and Walker Counties in Georgia.

If you would more information about the Intermediary Relending Program, download a fact sheet here, or contact Audra Kelly at akelly@sedev.org or 423-424-4267.