Traditionally start-ups and small businesses look to family, friends and their local bank for financial assistance. An additional source of capital includes locally managed Revolving Loan Funds or RLFs.
An RLF is a pool of money allocated specifically for lending and re-lending to qualified businesses in a targeted community. These RLFs are flexible financing tools to assist community development by providing loans to local business to create jobs and leverage private investment. The RLFs are locally administered and as the loans are repaid the funds are made available for additional lending to other local start-up or expanding businesses.
UCDC administers RLFs for both Ulster County and several local municipalities. These include:
- UCDC Telecommunications Fund
- Ulster County Revolving Loan Fund
- Ulster County Micro Loan Fund
- Ulster County Small Business Loan Fund
- Town of Esopus Waterfront Development Loan Fund
- Town of Lloyd Revolving Loan Fund
- Town of Shawangunk Loan Fund
- Town of Wawarsing Revolving Loan Fund
Typically, loans are made to businesses engaged in manufacturing, service, research and development, agriculture, and wholesale and commercial trade. Eligible businesses include minority or women owned enterprises, sole proprietorships, partnerships, and corporations.
Loan funds may be used for a wide variety of activities including: land acquisition, building expenses, machinery and equipment costs, start-up and working capital, infrastructure costs, and relocation expenses.
Loan eligibility is determined based upon several factors including: location of business, type of business, extent of project, total project cost, amount of money needed to complete the project, and the number of jobs created or demonstrably retained. Significant benefits derived from RLFs include their ability to provide gap financing, working capital and in some instances, lower interest rates. Most RLFs require bank participation of 40% to 60% of the total project cost. By providing needed funding leverage a business can take advantage of available funds that could not be obtained elsewhere. Often it is this gap financing that can mean the difference between expansion and more jobs, or cutbacks and layoffs.
Complete RLF details and applications can be obtained from Peter Gallagher, Director of Business Development and Loan Fund Administrator, at 845-338-8840 or pgallagher@ulsterny.com.
