Lending Programs

Business Lending Programs

Use of Proceeds:  Land, Building, and Equipment Payback Period:  Up to 25 years Min. Loan Amt./Cost Per Job:  $10,000 per job created Max. Loan Amt.:  $200,000 or 25% of the Project Cost Interest Rate:  Tied to Prime Rate Eligible Companies:  Start-Up or Expanding

Use of Proceeds:  Land, Building, and Equipment Payback Period:  Up to 25 years Min. Loan Amount/Cost Per Job:  $25,000/job created Max. Loan Amount:  $150,000 or 25% of the Project Cost Interest Rate:  Tied to Prime Rate Eligible Companies:  Start-up or Expanding

3)  Certified Development Company 503/504 Loan Program:
www.sba.gov/financing/sbaloan/cdc504.htm

Provides long-term, fixed-rate financing to small businesses to acquire real estate or machinery or equipment for expansion or modernization. Typically, a 504 project includes a loan secured from a private-sector lender with a senior lien, a loan secured from a Certified Development Company (CDC) (funded by a 100 percent SBA-guaranteed debenture) with a junior lien covering up to 40 percent of the total cost, and a contribution of at least 10 percent equity from the borrower. The maximum SBA debenture generally is $2 million (and up to $4 million in some cases). NEW: Investments in energy efficiency (at least 10% savings) and renewable energies as public policy goals without job requirements!
Please click on the PDF symbol to download a quick guide to the program:

CUSTOMER TYPES:
Loans provided to commercial printing services, hotel/motel, convenience stores, resort/marina, veterinary clinic, restaurants, and other businesses.

Use of Proceeds:  Land, Building, and Equipment, EE & RE Payback Period:  10 to 20 years Min. Loan Amount/Cost Per Job:  $50,000 Max. Loan Amount:  $2,000,000 or 40% of the Project Cost Interest Rate:  Determined at the Sale of Debentures Eligible Companies:  Existing or Expanding

4) Microloan Program:
www.sba.gov/financing/sbaloan/microloans.htm 

FUNCTION:
Provides short-term loans of up to $35,000 to small businesses and not-for-profit child care centers for working capital or the purchase of inventory, supplies, furniture, fixtures, machinery, and/or equipment. Proceeds cannot be used to pay existing debts or to purchase real estate. The SBA makes or guarantees a loan to an intermediary, who in turn, makes the microloan to the applicant. These organizations also provide management and technical assistance. The loans are not guaranteed by the SBA. The microloan program is available in selected locations in most states.  
CUSTOMER TYPES:
Loans provided to a veterinarian, sawmill, surveyor, rehabilitation services, agricultural services, sign and screen printing services, retail businesses, and other small businesses.

Use of Proceeds:  Equipment, Inventory, Working Capital Payback Period:  Up to 5 years Min. Loan Amount/Cost Per Job:  $2,000 Max. Loan Amount:  $25,000 Interest Rate:  Tied to Prime Rate Eligible Companies:  Start-up or Expanding

5)  Rural Business Enterprise Grant, Revolving Loan Fund (RBEG-RLF):
www.rurdev.usda.gov/rbs/busp/rbeg.htm 

FUNCTION: 
The Rural Business-Cooperative Service (RBS) provided a grant under the Rural Business Enterprise Grants (RBEG) Program to the PADD, who then created a Revolving Loan Fund Program.  The RLF allows ultimate recipients to borrow the funds to finance and facilitate development of small and emerging private business enterprises located in any area other than a city or town that has a population of greater than 50,000 inhabitants and the urbanized area contiguous and adjacent to such a city or town.  Grant funds do not go directly to the business.  The maximum RBEG-RLF loan is generally $150,000. 
CUSTOMER TYPES:
Loans provided to printing services, specialty food franchises, and automotive body repair shop.

Use of Proceeds:  Land, Building, and Equipment Payback Period:  Up to 25 years Min. Loan Amount/Cost Per Job:  $25,000/job created Max. Loan Amount:  $100,000 Interest Rate:  Tied to Prime Rate Eligible Companies:  Start-up or Expanding

6)  PACRO, Entrepreneurial Development Program:

FUNCTION:
The purpose of the PACRO (Paducah-Area Community Reuse Organization) Entrepreneurial Development Loan Program is to finance business facilities and community development projects.  The program targets people associated with the Paducah Gaseous Diffusion Plant (PGDP), whether they are employees or family members of the United States Enrichment Corporation (USEC), subcontractors, or in some other capacity associated with PGDP.  The maximum PACRO Entrepreneurial Loan is generally $100,000.
CUSTOMER TYPES:
Loans provided to restaurants, a specialty store, an advertising distribution company, and environmental clean-up companies.

Loan Packaging Assistance

1)  SBA 7(a) Loan Guaranty Program:
www.sba.gov/financing/sbaloan/7a.htm 

FUNCTION:
Serves as the SBA’s primary business loan program to help qualified small businesses obtain financing when they might not be eligible for business loans through normal lending channels. The SBA 7(a) is also the agency’s most flexible business loan program, since financing under this program can be guaranteed for a variety of general business purposes.  Loan proceeds can be used for most sound business purposes including working capital, machinery and equipment, furniture and fixtures, land and building (including purchase, renovation, and new construction), leasehold improvements, and debt refinancing (under special conditions). Loan maturity is up to 10 years for working capital and generally up to 25 years for fixed assets. 
CUSTOMER TYPES:
Start-up and existing small businesses, delivered through commercial lending institutions.

2)  SBA Low-Doc Program:
www.sba.gov/financing/lendinvest/lowdoc.html

FUNCTION:
Once a small business borrower meets the lender's requirements for credit, the lender may request a guaranty from the SBA through SBA LowDoc procedures. This is a quick, two-step process: (1) the borrower completes the front of the SBA's one-page application, and the lender completes the back, and (2) the lender submits a complete application to the SBA and usually receives an answer within 36 hours.  Maximum Low-Doc loan is $150,000 at an 85% guaranty. 
CUSTOMER TYPE:
Start-up and existing small businesses, delivered through commercial lending institutions.

3)  SBA Loan Prequalification:
www.sba.gov/financing/sbaloan/prequalification.htm

FUNCTION:
Allows business applicants to have their loan applications for $250,000 or less analyzed and potentially sanctioned by the SBA before they are taken to lenders for consideration. The program focuses on the applicant’s character, credit, experience, and reliability rather than assets. An SBA-designated intermediary works with the business owner to review and strengthen the loan application. The review is based on key financial ratios, credit and business history, and the loan-request terms. The program is administered by the SBA’s Office of Field Operations and SBA district offices. 
CUSTOMER TYPES:
Start-up and existing small businesses, delivered through commercial lending institutions.

4) Business & Industry Loan Guaranty Program:
www.rurdev.usda.gov/rbs/busp/b&i_gar.htm

FUNCTION:
The Business and Industry (B&I) Guaranteed Loan Program helps create jobs and stimulates rural economies by providing financial backing for rural businesses. This program provides guarantees up to 80 percent of a loan made by a commercial lender. The primary purpose is to create and maintain employment and to improve the economic climate in rural communities. The maximum aggregate B&I Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25 million. 
CUSTOMER TYPE:
Start-up and existing small businesses, delivered through commercial lending institutions.

5)  Rural Economic Development Loans:
www.rurdev.usda.gov/rbs/busp/redg.htm

FUNCTION:
Provides zero-interest loans to electric and telephone utilities financed by the Rural Utilities Service (RUS), an agency of the United States Department of Agriculture, to promote sustainable rural economic development and job creation projects. 
CUSTOMER TYPES:
Start-up and existing small businesses; third-party recipients may be private or public organizations having corporate and legal authority to incur debt.

6) Industrial Development/Revenue Bonds:

FUNCTION:
Financing can be used to finance manufacturing projects and their warehousing areas, major transportation and communication facilities, most health care facilities, and mineral extraction and processing projects. Bond funds may be used to finance the total project costs including engineering, site preparation, land, buildings, machinery and equipment, and bond issuance costs.
CUSTOMER TYPE:
Start-up and existing small businesses; third-party recipients may be private or public organizations having corporate and legal authority to incur debt.

7) Tennessee Valley Authority:
www.tva.gov

FUNCTION:
The TVA program is used to finance business facilities and community development projects.  TVA and its partners support firms and target commercial-sector businesses through strategic partnerships, outreach activities, networks, electronic tools, and business assistance.  The goal of TVA is to ensure the growth and success of the Valley’s business community.
CUSTOMER TYPE:
Start-up and existing small businesses; third-party recipients may be private or public organizations having corporate and legal authority to incur debt.

PADD's Financial Resources
The PADD’s Business Lending Department utilizes funding/programs from the following agencies:

	U. S. Department of Commerce, Economic Development Administration
	U. S. Small Business Administration
	U. S. Department of Agriculture, Rural Development, Rural Business Service, and Rural Utility Service, utilizing the area’s electric and telephone co-operatives
	U. S. Department of Energy, through the Paducah-Area Community Reuse Organization
	Paducah Area Community Reuse Organization
	Tennessee Valley Authority