Small Business Loan Program
The EDA’s Small Business Loan Program is made possible by the Intermediary Relending Program (IRP) through the U.S. Department of Agriculture (USDA). The program is designed to stimulate the economy and job growth. Under the IRP program, loans are provided to local organizations (intermediaries) for the establishment of revolving loan funds. These revolving loan funds are used to assist with financing business and economic development activity to create or retain jobs in disadvantaged and remote communities.
The Front Royal-Warren County Industrial Development Authority (dba Economic Development Authority) is a USDA approved “Intermediary,” and provides low-interest loans to qualifying businesses.
Who can apply for loan funds from the intermediaries?
The following entities are generally eligible to apply for loans from intermediary lenders provided they owe no delinquent debt to the Federal Government:
- Is an independent, locally owned business or locally controlled franchise.
- Owns, rents, or leases a permanent physical location in Warren County, VA.
- Has no more than 50 employees.
- Less than $1 million in annual gross revenue.
- Has a current Warren County business license, registered with the Commonwealth of Virginia.
For more information, contact Joe Petty at 540-252-0050 or [email protected]
Description of Loan Fund Operating Procedures:
- Funding Limits: The maximum commitment of IRP funds will not exceed 50% of the total project cost. In addition, the level of funding will not exceed $25,000.00.
- Loan Term: Loans will be for a period of five (5) years, though loans may be written for fewer than five years.
- Interest Rate: The interest rate will be established at the time of closing the loan and will be indexed from the prime rate as reported in the Wall Street Journal to the nearest 0.5% or 1% and will be fixed for the term of the loan.
- Administrative Fees: Fees shall be as follows; Application Fee: $200 (non-refundable); Origination Fee: 2% of Loan Amount (option to be deducted from loan payment); Late Payment Fee: 5% of Amount Due; Applicable Attorney Fees for any default process.
- Loan Security/Collateral: The EDA shall review each loan request for the adequacy of collateral and shall include a report concerning the loan security when the loan request is approved. EDA will assume a First Lien position, but this may be negotiated depending on financial and managerial stability of the project. Intermediary will accept equipment, real estate, accounts receivable, inventory, stock, and any other assets as security for loans. All loans will require personal guarantees of owners having 20% or greater ownership.
- Use of Proceeds: Loan Pool Funds may only be used to carry out the project as outlined in the Loan Application and supporting data.
- Prepayment of Loan: The borrower may prepay the loan at any time without penalty.
- Loan Satisfaction: Once the borrower has repaid the loan, the EDA Board of Directors shall issue a certificate of satisfaction documenting the loan details and payoff.
Start your application today by clicking the following link!
