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All loans must be secured by collateral in an amount at least equal to the face value of the loan. Personal guarantees are also required by all principal shareholders owning over 20% or more of the business.
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The Rural Revolving Loan Fund (RRLF) uses capital provided by the Economic Development Administration and Henry County, for low-interest loans to help qualified businesses locate, expand or remain in Henry County. These loans are supplemental, providing a portion of the total needed for a given project. The balance must be obtained through conventional sources, i.e. bank financing or equity. RRLF loans may be used in conjunction with other financing programs, such as SBA 504 loans, State of Illinois economic development loans, and assistance from private development groups.
The RRLF was established to create and retain jobs within Henry County. Thus, a condition of this financing is that a minimum of one job must be created or retained for every $10,000 of RRLF funds borrowed.
Just about any type of business within Henry County (other than very speculative ventures) may seek RRLF assistance. The program is available to all industrial, service, and commercial businesses.
The RRLF monies can be used in a variety of ways. The funds can be used for the purchase of land and buildings, machinery, and equipment, as well as for working capital.
The maximum amount which can be obtained through the RRLF is $100,000. In most cases, a borrower may carry only one RRLF loan at a time. RRLF can generally finance up to one-third of a total project, and there must be a commitment in place for the balance, including 10% equity from the borrower, at the time of application.
The maximum RRLF loan period is ten years. The loan payback is generally structured according to what the monies are used for. For example, loans used for machinery and equipment costs generally have a 5 to 7-year payback loans for fixed assets usually run 10 years. Working capital loans cannot exceed seven years.
The interest rate is generally 4% below the current prime rate. The lowest interest rate that can be charged is 4%.