Revolving Loan Fund
Through the creation of a Revolving Loan Fund (RLF), SMTC is seeking to improve the quality of life in Iowa’s rural areas by contributing to the long-term improvement in the economy. This Federally sponsored program makes low interest loans available to organizations with initiatives that create or retain jobs, cultivate diversity in the economy, improve workforce education and skills, or upgrades the public infrastructure to improve the health, safety, and/or medical care of rural residents.
- Eligible Applicants – organizations involved in community or economic development projects. This includes new or expanding private business, local governments and non-profit community development organizations.
- Eligible Uses of Funds – land purchase, buildings, fixed assets, machinery and equipment.
- Ineligible Uses of Funds – pre-development cost, refinances or residential housing projects
- Loan Terms – set by the Stratford Mutual Telephone Company Board of Directors and based upon the financial need of the project. The minimum loan amount offered will be $5,000 and the maximum loan amount offered will be $150,000.
- Other Funding – a minimum of 20% of the project must be funded from equity or debt sources other than the Stratford Mutual Telephone Company RLF.
- Interest Rates – vary from 0% to Prime Rate depending on the financial need of the project and its benefits to the rural area. Generally loans will have a 4% interest rate.
- Security – adequate collateral is required for the loan request. Preferred security is an irrevocable letter of credit. Other acceptable collateral includes a first lien on real estate and/or machinery and equipment.
- Terms – maximum loan term is 10 years. Generally, the length of the loan will be based on the collateral offered by the applicant; building and real estate – 10 years, equipment – 5 to 7 years.
- Administration Fee – generally, the RLF will charge an annual administration fee equal to 1% of the outstanding balance of the loan. All closing costs are the responsibility of the loan applicant.
- Fund Availability – applications are accepted at the Stratford Mutual Telephone Company offices when the RLF has an available balance of at least $20,000.
RLF Plan Description – this document provides all the details about the program and should be reviewed by anyone interested in applying
Application Packet – in this packet you’ll find the application that needs to be completed, a form that allows us to obtain an applicant’s credit records, tips for getting a D&B DUNS number, which is required for this application and additional forms required in the process as part of a Federal sponsored program. Below are the specifics of each document you’ll find:
- Application – this form will need to be filled out by all applicants, it also outlines what should be included in a business plan and any other documents that will need to be submitted with the application
- Consent to Obtain Credit Report – as part of the application evaluation SMTC will need to obtain a report of applicant’s credit records, this document gives us the permission to do so.
- Assurance Agreement – a document that will need to be completed and signed by all applicants that states the business is in compliance with and will continue to comply with Title VI of the Civil Rights Act of 1964.
- Nondiscrimination Statement – this information in this document is requested by the Federal Government in order to monitor compliance with the Federal Laws prohibiting discrimination against applicants seeking to participate in the program.
- Getting a D&B DUNS Number – because this is a program sponsored by the Federal Government, all applicants must have a DUNS number.
SMTC in an equal opportunity provider, employer, and lender. To file a complaint of discrimination, write to USDA, Office of the Secretary for Civil Rights, 1400 Independence Avenue, SW, Stop 9410, Washington, DC 20250-9410, or call toll-free at (866) 632-9992 (English) or (800) 877-8339 (TDD) or (866) 337-8642 (English Federal-relay) or (800) 845-6136 (Spanish Federal-relay).