The U.S. Department of Agriculture (USDA) sponsors “Business & Industry” guaranteed loans in rural communities. USDA guarantees up to 80% on loans from $750,000 to $5 million and up to 70% on loans up to $10 million. Rates are fixed or variable and negotiated between lender and business. Terms are typically seven years for working capital, 15 years on equipment and 30 years on real estate.
HUD’s Section 108 Loan Guarantee Program is the loan component of the Community Development Block Grant (CDBG) providing communities a resource to fund economic development, housing, public facilities and large scale physical development projects. Section 108 offers low interest loans for a variety of economic development, housing rehabilitation, public facilities, and large-scale physical development projects.
The EDA RLF Program supplies small businesses and entrepreneurs with gap financing to start or expand their business. As part of the EDA’s Economic Adjustment Assistance Program, EDA’s regional offices award competitive grants to units of local government, state governments, institutions of higher education, public or private non-profit organizations, EDA-approved economic development district organizations, and Indian Tribes to establish RLFs.
REAP encourages the commercial financing of renewable energy (bioenergy, geothermal, hydrogen, solar, wind and hydro power) and energy efficiency projects. Under the program, project developers will work with local lenders who in turn can apply to USDA Rural Development for a loan guarantee up to 85 percent of the loan amount.
This federal program offers opportunities to producers to development such fuels through the biofuels assistance programs. These programs provide loan guarantees for up to $250 million towards the development, construction and retrofitting of commercial-scale biorefineries and similar products.
IDB financing is a financing option available for the acquisition of manufacturing facilities and equipment. IDBs provide a method for middle market manufacturers to access the private capital markets at tax-exempt rates. The IDB interest rate is lower than bank financing because the interest paid to the investor is exempt from state and federal income tax. A government entity will issue bonds and loan proceeds to the company. The company’s obligation to repay the loan is secured by a direct-pay Letter of Credit from a bank rated ‘A’ or better. IDBs can be issued by the California Infrastructure and Economic Development Bank (I-Bank), cities, counties, and joint powers authorities.
- $20 million maximum loan
- Interest rate 20-30% below conventional financing rates
- Primary business activity: manufacturing, processing, fabrication
- Primary use: acquisition, construction, rehab, equipment
This program encourages participating banks and lending institutions to provide loans to small businesses that fall outside of conventional underwriting standards. Small business owners that have difficulty in obtaining conventional financing may qualify for a CalCAP loan through any CalCAP lender. CalCAP insures loans made by Participating Lenders to small businesses in order to assist their growth efforts with eligible use of fund proceeds to acquire land, construct or renovate buildings, purchase equipment, working capital, energy efficiency improvement projects as well as bridge financing needed prior to obtaining permanent financing (including SBA 504 bridge loans).
CS pledges cash to cover the collateral shortfall of a loan made by eligible lenders in order to enable financing that otherwise might not be available to a small business. The Collateral Support Program provides up to 40% of the loan value, in the form of a cash deposit, with the possibility of an additional 10% for businesses located in a Severely Affected Community.
This program assists businesses with the creation and retention of jobs while encouraging investment in low-to-moderate income communities. The SBLGP enables small businesses to obtain a loan and establish a favorable credit history with a lender so the business may obtain loans in the future without the assistance of the program.
The California Air Resources Board has developed innovative financing programs to provide fleet owners, particularly small business owners, easier access to loan opportunities. The ARB’s loan programs offer several options to increase financing accessibility including loans, loan guarantees and other mechanisms to assist industries affected by ARB regulations.
PLACE Program for Off-Road Vehicles is a loan guarantee program available for off-road vehicle owners requiring assistance for financing retrofits, repowers and replacements.
The PLACE Program for On-Road Vehicles (formerly On-Road Heavy-Duty Vehicle Air Quality Loan Program) offers financial assistance to fleet owners subject to two regulations approved by the Board in December 2008.
The Goods Movement Emissions Reduction Program may offer loan assistance to upgrade equipment used in freight movement along California’s trade corridors.
PCR provides financial, educational and consulting services. PCR’s financial programs include: loan guarantees, disaster bridge loans, and direct (environmental) loans. Other services include Small Business Seminars, Small Business Consultants Program and Small Business Start-Up Guide.
LACDC offers several lending programs ranging from a Micro Loan to a Float Loan Program. Loans vary in size up to $10 million.
- Business Loan Programs – a revolving loan fund that assists companies with expansion and development offered by the LACDC.
- Float Loan Program – provides short-term loans for land acquisition, construction, equipment, and working capital for businesses, private developers and public agencies.
- Technology Loan Program – provides loans for start-up, early state high technology firms located in the participating innovation centers of the Los Angeles County Innovation Network.
- Business Expansion Loan Program – provides financial assistance to small and medium sized businesses to create and expand permanent job opportunities and promote economic development in the County.
- Utility Loan Program – a revolving loan fund designed to assist cities, a mutual water company, or water district finance improvements to their water delivery systems, capacity, and seismic upgrades. Amount: $50,000 to $1,000,000. Current rate: fixed, at six and one-half percent (6.5%). Loan fee: 2 points. Term: varies from 5 to 20 years.
TAP is conducted by both seaports as part of the Clean Air Action Plan. A committee reviews carbon emission reduction technologies with seaport applications and provides grant funds to companies whose technologies meet the committee’s qualification standards.
South Coast AQMD offers a number of programs to and financial incentives to assist business in implementing cleaner technologies, reduce emissions, employ environmental friendly cleaners and solvents and assist in compliance with clean air regulations. This applies to the cities of Glendale, Burbank, San Fernando, and Downtown LA.
RISE provides financial assistance to businesses located in low-to-moderate census tracts of Los Angeles County. Financing for Micro loans range from $500-$30,000 and Expansion Loans range from $30,000 to $250,000. RISE hosts workshops designed to assist new and existing firms develop computer and business management skills.
VEDC has consistently provided services to small and medium-sized business owners, entrepreneurs and members of the communities it serves. VEDC has also grown to become the largest non-profit business development corporation in the metropolitan Los Angeles area. For business owners, start-ups, and all businesses – VEDC has many non-conventional options for loans available. A few examples include:
- Microloan Programs ($1,000 – $50,000)
- Small Business Loan Programs ($50,000 – $700,000)
- CA Small Business Loan Guarantees ($25,000 – $500,000)
- SBA 7(A) Loans ($35,000 – $2,000,000)
- SBA 504 Loans ($125,000 – $5,000,000)
The City of Los Angeles Major Project Financing program was established to facilitate and “gap” finance assistance for large commercial and industrial real estate projects that provide expanded economic opportunities and jobs for low and moderate income residents of the City.
Kiva City Los Angeles (LA) is an initiative that enables anyone with access to the internet a chance to support small business owners, local economies, and local jobs in Los Angeles launched today. KIVA also aims to expand the awareness and availability of microfinance opportunities among small business owners and aspiring owners in the Greater Los Angeles Area.