Rural Business Development through Collaborative Community Action Revolving Loan Fund
In response to a 2014 Rural Business Enterprise Grant application, USDA Rural Development provided $50,000 in funds to Western Dairyland EOC, Inc. to create a micro-loan program available to clients of participating Jobs & Business Development (JBD) programs. The participating JBD programs, and the Wisconsin counties where the micro-loan fund is available, are:
- ADVOCAP, Inc. - Green Lake
- CAP Services, Inc. - Marquette, Waushara
- Central Wisconsin Community Action Council, Inc. - Adams, Juneau
- Couleecap, Inc. - Vernon, Crawford
- Indianhead Community Action Agency, Inc. - Ashland, Bayfield, Burnett, Iron, Price, Rusk, Sawyer, Taylor, Washburn
- Southwestern Wisconsin Community Action Program, Inc. - Lafayette, Richland
- Western Dairyland EOC, Inc. - Buffalo, Eau Claire, Trempealeau, Jackson
The objective of the Micro-Loan program is job creation. Loan applications are to be accompanied by documentation, such as a business plan, that gives evidence of job creation that would be enabled by the requested loan. Self-employment for a business owner is valid job creation. For purposes of the Micro-Loan program, a “job” is defined as at least 30 hours of work activity per week that provides primary income. The Micro-Loan program is not intended for “side-line” businesses or support of part-time jobs.
Eligible uses of Micro-Loan funds include:
- Tools or equipment
- Facility renovation or remodeling
- Starting inventory
- Professional services, such as web site development
- Working capital
Ineligible uses include:
- Real estate
- Agricultural production
- Regional planning
- Programs operated by cable television systems
- Partial funding where the balance of the funding is not committed
Applicant eligibility criteria are:
- United States citizen or federally approved United States resident.
- One concurrent loan per household.
- Existing or new business.
- Existing business has less than $1 million in gross annual sales and less than 50 employees.
- New business is projected to have less than $1 million in gross annual sales and projected to have less than 50 employees.
- Primary business address is located in Buffalo, Eau Claire, Jackson or Trempealeau county.
- Primary business address is located in an area defined as eligible by USDA Rural Development.
In the Micro-Loan program, loan acceptance or denial decisions are made by a Loan Committee. The Loan Committee has the authority to specify additional terms and/or conditions that would make an otherwise denied application acceptable. Should an applicant decline to meet specified terms or conditions, the application is denied and no loan is issued.
Standard terms are:
- The minimum loan amount is $2500.00. The maximum loan amount is $15,000.00, subject to funds availability.
- Loan terms are 1, 2 or 3 years according to client request, but subject to Loan Committee approval.
- The standard interest rate will vary between 4% and 8%, depending on factors such as job creation, the current prime rate and overall l risk. Interest is charged on the outstanding balance whether or not the entire loan amount has been disbursed.
- A $50 closing fee plus any out-of-pocket loan set-up expenses, such as lien filing fees, is due before or at the time of closing.
- The applicant agrees to loan repayment via ACH automatic withdrawal.
- The applicant secures the loan with collateral acceptable to the lender and of cumulative value the lender accepts as at least equal to the loan amount.
- The applicant provides proof of property insurance. The property insurance is to provide coverage for any items used as collateral, including items to be acquired with loan proceeds. The property insurance is to provide sufficient coverage limits to repair or replace the items to be acquired with loan proceeds should those items become unusable through an event covered by the insurance policy. If loan proceeds are to be used to purchase property insurance, written estimates/quotes are required. Estimates/quotes are to be on agency/company stationary.
For more information or to apply, contact Karman Briggs at 715-836-7511 x1174.