Regional Rural Development Revolving Loan Fund

Medium

The NDDF administers the Regional Rural Development Revolving Loan Fund, which provides flexible gap financing to primary sector businesses located in a community of less than 8,000 in population or located more than five miles outside of city limits. Funds are available through direct loans, participation loans, subordinated debt and equity investments.

Use of funds: The Regional Rural Development Revolving Loan Fund funds may be used to provide working capital or to finance the purchase of fixed assets, but not to refinance existing debt. Funds may be used to purchase real property and equipment, expand existing facilities, provide working capital, and purchase inventory.

Debt:		Equity:
BORROWER	Any primary sector business	BORROWER	Any primary sector business
FUNDING LIMIT	Up to $3,000,000 Average Award: $300,000	FUNDING LIMIT	Up to $3,000,000 Average Award: $250,000
INTEREST RATE	Subject to risk of project	RATE OF RETURN	In cases of a preferred security or convertible note: Interest/Dividend Rate: Subject to risk of project
TERM	1-10 years, dependent upon project	TERM	1-10 years, dependent upon project
MINIMUM EQUITY REQUIREMENT	15%	MINIMUM EQUITY REQUIREMENT	15%
PERSONAL/CORPORATE GUARANTEES	Yes	PERSONAL/CORPORATE GUARANTEES	No
COST AND FEES	1% of capital deployed plus any legal fees incurred by NDDF.	COST AND FEES	1% of original loan or equity balance plus any legal fees incurred by NDDF.
MISCELLANEOUS	For business located in cities with a population of less than 8,000 or more than 5 miles outside city limits	MISCELLANEOUS	For business located in cities with a population of less than 8,000 or more than 5 miles outside city limits