Rural Development RLF Loan

USDA Rural Development Intermediary Relending Program assistance is available through the SGRC as low interest loan funds designated to provide assistance to finance business facilities and community development projects in rural areas. The funds must be used for community development projects, establishment of new businesses and/or the expansion of existing businesses, creation or retention of employment opportunities.

ELIGIBILITY

Use of Loan Proceeds

  • Land & Building Acquisition
  • Machinery & equipment
  • Construction
  • Working capital
  • Renovation of existing structure
  • Professional fees

Loan Amount

  • Up to $150,000 total Rural Development exposure per borrower. Rural Development funds may not exceed 75% of the total project cost.

Type of Business

  • Eligible businesses include most operating-for-profit businesses except for hotels, motels, tourist homes, convention centers, or any other tourist or recreation center. Ineligible businesses include: charitable and educational institutions, fraternal organizations, churches, and organizations affiliated or sponsored by churches; businesses producing agricultural products and media type businesses such as television and newspaper.

LOAN PROGRAM PROCEDURE

Approval

  • SGRC staff will request information from the borrower in order to complete the RLF application. SGRC staff will then submit the application for SGRC Loan Board approval. If the loan board makes the approval, SGRC staff will coordinate with the participating private lender to close the loan.

Servicing

  • The type of participation from a private lender will determine the SGRC's role in the loan servicing process.

Fee Payment

  • An initial servicing fee of 1% is based on the Rural Development loan amount. Fees may be deducted from the loan proceeds.

LOAN PROGRAM FEATURES

Benefits

  • SGRC prepares the majority of the paperwork for the business.
  • Businesses obtain loans which are not otherwise available.
  • Lower interest rates.
  • Lower Down Payments

Interest Rate

  • Interest rate on the SGRC's portion of the loan is generally at or below market rate. Interest is charged only on the unpaid balance of the principal and for the actual time used. The bank sets the rate of interest on their portion of the loan. The rate on the SGRC portion may be fixed or variable.The interest rate on the loan is determined at the time of submission of the loan application.

LOAN PROGRAM REQUIREMENTS

Cash Flow

  • Borrower’s adjusted cash flow must be adequate to service the entire debt.

Credit History

  • Borrower must have satisfactory history of meeting debt obligations in a timely manner.

Management

  • Borrower must demonstrate to the SGRC that it has experienced and adequate management to operate the company successfully.

Location

  • The project must be located within the eighteen Southern Georgia counties of Atkinson, Bacon, Ben Hill, Berrien, Brantley, Brooks, Charlton, Clinch, Coffee, Cook, Echols, Irwin, Lanier, Lowndes, Pierce, Tift, Turner, or Ware. Valdosta is not eligible for IRP funds due to its population size.

Collateral and Participation Position

  • The SGRC generally shares the collateral on a pro-rata basis with the private lender. The private lender must be willing to participate with the SGRC for up to 50% of the loan amount. The SGRC will require adequate collateral to secure the debt. Real property used as collateral will have to be appraised by a qualified appraiser using the cost, income, and market approach.
  • Personal guaranty required of those persons or entities having 20% or more ownership in the business; other guarantees may be required.
  • Secondary collateral may be required. This is at the discretion of the SGRC Loan Board.
  • Hazard insurance equal to the value of the fixed assets pledged assigned to SGRC and life insurance assignments on principals equal to the loan amount.

FOR MORE INFORMATION

Contact the Southern Georgia Regional Commission, 327 West Savannah Ave.
Valdosta, Georgia 31601
(229)333-5277 / FAX: (229)333-5312
LOAN OFFICERS: Michelle Frey and Skip Long