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Revolving Loan Fund
The City of Mt. Vernon receives funding assistance through the Community Development Assistance Program (CDAP) administered by the Illinois Department of Commerce and Economic Opportunity (DCEO). CDAP funds are awarded to the City in the form of grants that are passed on to specific businesses in the form of low interest loans for new investments and expansions which result in the creation of new jobs and retention of existing jobs as well as enhance future investment opportunities within the community. The loan funds are paid back to the City and placed in the Revolving Loan Fund which is used specifically for eligible projects. Thinking of growing your business? The City of Mt. Vernon’s revolving loan fund (RLF) may help you do it. The RLF program is designed to provide partial financing to assist businesses desiring to locate or to purchase or expand existing facilities within the City of Mt. Vernon. The program is intended to serve as “seed money” that is to leverage additional capital from other sources in support of the project. Eligible Uses of RLF Proceeds 1. Purchase land, buildings, equipment, machinery and other fixed assets 2. Site improvements including construction of new facilities or additions and infrastructure extension costs 3. Inventory and working capital expenses including employee salaries, general operation expenses, and advertising and marketing expenses. Goals of RLF 1. Stimulate economic growth in the City of Mt. Vernon 2. Assist new or existing businesses to create and retain jobs 3. Ensure that jobs created or retained benefit low-moderate income households 4. Provide businesses with the opportunity to expand 5. Encourage and leverage loans to businesses by area private financial institutions 6. Ensure infrastructure to support efficient growth and development Eligible Borrowers Applications which will assist in the retention of the community’s industrial base or assist in the start-up or expansion of new businesses within the stated geographic location will be considered. Commercial enterprises such as retail establishments, service businesses, offices, industrial related firms, etc. are eligible to apply for and receive financial assistance through the RLF. In order to be eligible for a loan, the business must be credit worthy and must comply with the requirements of the program and agree to enter into a loan agreement specifying the terms and conditions of the loan. Geographic Location Targeted for RLF Areas located within the corporate limits of the City of Mt. Vernon will be targeted. The City does have the flexibility to extend assistance outside the corporate limits within 1 1/2 miles of the corporate limits or for projects which are determined to principally benefit residents of Mt. Vernon. The business will be required to annex or enter into a pre-annexation agreement. Loan Application Requirements 1. Borrowers must have the ability to repay the loan and be considered an acceptable risk 2. Current financial data of business and personal financial statement of principal owners must be provided 3. Borrowers must agree to enter into a written loan agreement defining loan terms and agreements. 4. The project must conform to planning and zoning laws 5. Every effort must be made by the borrower to fill jobs with unemployed or underemployed residents within the community. Loan Limits Each RLF loan has a minimum limit of $30,000 and a maximum limit of $450,000 Leverage Requirements The City’s portion of the project may not exceed 50% of the total project costs. Financial statement and loan commitment letters from participating lenders are required. Job to Loan Ratio Borrowers must demonstrate and insure that one new job will be created or retained for every $15,000 in loan funds approved through the RLF program. To be eligible for a loan, a business must create a minimum of two jobs. Interest Rates Loans will be made at interest rates of not less than 3% nor more than 10%. The exact rate is based upon the size and scope of the project, impact on the local economy, the term of the loan, the risk associated with the loan and current market rates. Terms and Repayment The term of the loan coincides with the proposed use of the funding for which the loan proceeds are approved and range from 7-20 years. Collateral and Security Requirements Contact the City of Mt. Vernon for more information on collateral and security requirements. Merle Hollmann Mary Ellen
Bechtel
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