NCNMEDD STRATEGY FOR ECONOMIC IMPACT :: GO BACK TO LOANS FOR SMALL BUSINESSES

The general strategy espoused by all NCNMEDD revolving loan funds includes the following points:

• Jobs can be created by borrowing, but they are only maintained by profitable companies;

• Profitable companies have good business and management practices, a large enough market to sustain them, and appropriate cash flow for both debt service and growth;

• The RLF succeeds when it uses its loans to both improve business practices and improve cash flow;

• The RLF rarely succeeds when its only role is in accepting weak or no collateral, or as a replacement to owner's equity.

NCNMEDD's attention to economic diversification and special consideration to natural resources based business opportunities leaves considerable latitude for the types of businesses and firms that can benefit from RLF loans. Loans have and will continue to be made to tourism businesses, timber and wood products businesses, manufacturing businesses and service businesses. Because of the small economic base in most counties in the District, it is difficult to find any single sector with enough potential borrowers to constitute a niche.

In general, loans will be aimed at businesses that will create or retain jobs while strengthening the natural resources sector and/or diversifying the regional economy. A business receiving a loan will generally have an identified market capable of sustaining debt and growth, a willingness to change and improve business practices and management, and a financial position where the addition of RLF financing will improve cash flow, sustaining or leading to long term profitability.

The District generally offers financing for acquisition of land, building construction, expansion, renovation, equipment, and working capital. The District may make a term loan, extend a line of credit, or on rare occasions, offer a loan guarantee.

Terms of loans will vary with the conditions for each deal. Revolving lines of credit may be established. Term loans will be based on business needs and collateral offered, generally between five and seven years for equipment and shorter periods for working capital. Interest rates will be fixed for the term of the loan, and will generally be at or below the prevailing commercial rate, but above a floor of four per cent.

OTHER INFORMATION ABOUT
ECONOMIC DEVELOPMENT LOANS TO SMALL BUSINESS

What is Economic Development Finance?
Strategy for Economic Impact [You are here.]
How do I get a Loan?
EDA Revolving Loan Fund
Tri-County Regional Revolving Loan Fund
Santa Fe Direct Loan Fund

Other Business Resources:
Link to SBDC Web Pages
WesstCorp
Community Development Loan Fund
Enchantment Land Economic Development Corporation
Coronado Ventures Forum