RLF Conference April 10, :15 AM: Track 1: How to Establish an RLF – Sources of Funding Randy Frescoln Business – Cooperative Program Director USDA Rural Development

Funds established Revolving Loan Funds (RLF) are established through three USDA Rural Development Programs 1.Rural Business Enterprise Grant (RBEG) 2.Rural Economic Development Grant (REDG) 3.Intermediary Relending Program (IRP)

Rural Business Enterprise Grant Established by nonprofit organizations and public bodies without an established commercial loan portfolio. –To assist small and emerging private business enterprises. –RLF size is typically smaller - $50,000 - $70,000

Rural Economic Development Grant Established by Rural Electric Cooperatives and Rural Telephone Companies who borrower funds from the Agency’s Utility Programs. –To promote rural economic development and job creation projects. – RLF size is typically $300,000 - $400,000

Intermediary Relending Program LOAN vs. Grant (1% - 30 years) –Established by nonprofit and public bodies with lending experience and existing commercial loan portfolio. –To alleviate poverty and increase economic activity and employment in rural communities. –RLF size is usually larger > $500,000

In general, all Agency RLFs: –Include matching funds –Are administered in accordance with a RLF plan –Are used to provide gap financing –Require periodic reports to the Agency –Require ongoing oversight by the Agency