The City of Eau Claire Revolving Loan Program is a public financial initiative designed to support larger commercial and industrial businesses. Its main focuses are on adding well-paying jobs, growing the tax base, facilitating business expansions, supporting local enterprises, recruiting outside businesses to the city, enhancing the region’s quality of life, and promoting a diverse economy.
Flexible Loan Amounts
Businesses can apply for loans ranging from $10,000 to $100,000, making capital attainable to more companies.
Tailored Repayment Periods
Loan terms range between 3-10 years tailored to the use of funds, allowing businesses to play for repayment.
New Job Creation
Loan uses target at least one new job for every $35,000, encouraging new employment opportunities.
Fixed Interest Rate
Loans are offered at a 4% fixed annual rate, providing predictable and manageable repayment terms.
Diverse Use of Funds
Loans are eligible for uses from permanent working capital to real estate, offering flexibility to meet various business needs.
Economic Diversification
The program supports a wide variety of business sectors, enhancing the city’s economic base.
Loan Amounts
The minimum loan will be $10,000 and the maximum will be $100,000. Unless special approval is given by the Loan Administration Board, lending institution participation is required for capital projects. Direct loans may be made up to 100% of the project for working capital needs.
Interest Rate
The interest rate shall be a 4% fixed annual rate. The Finance Director will review the program’s interest rate annually as compared to market conditions and recommend changes, if any, to the Loan Administration Board, who shall have the authority to adjust the rate accordingly.
Terms
The terms of the loan will vary depending on the collateral and use of funds. Short terms will be encouraged. Typical loan terms are 10 years for real estate purchases or renovations, 3-10 years for capital equipment, or 3-5 years for working capital. If it is determined by the Loan Administration Board that deferral of the principal payment for a period not to exceed 1 year would likely lead to the success of the project, and that upon review of updated financial information filed by the borrower that loan collateral remains a viable and likely source of recovery in case of default, deferral may be allowed as approved by the Board.
Collateral
The City will record a lien against the collateral pledged for the loan. The collateral pledged must be sufficient to cover the value of the loan and be related to the business activities covered by the loan or other real property. Unlimited business and personal guarantees will also be required of all owners with a 20% or greater ownership interest in the business.
The City’s Economic Development staff will review the applicant’s materials to ensure accuracy and completeness. They will then bring the application forward to the City’s Loan Administration Board, who will review the entirety of the application and approve or deny the loan request.
Eligible Borrowers
Any manufacturing or service business, excluding restaurants, located in the City of Eau Claire that has been in business for at least three years and demonstrates an ability to repay the loan. Targeted areas include Downtown Eau Claire, Sky Park Industrial Center, Gateway West and Northwest Business Parks, Chippewa Valley Industrial Park, and other commercial or industrial clusters.
Eligible Uses of Funds
Permanent working capital; inventory purchases and supplies; acquisition of equipment, machinery, furniture and fixtures; leasehold improvements; building renovation and rehab; and real estate acquisition.
Ineligible Uses of Funds
Refinancing existing debt. However, upon Board approval, RLF borrowers may move the loan to a different financial institution if the City’s lien position will not be compromised. Relocation of companies located outside the City of Eau Claire.
Follow these steps to apply for the financing options offered by the City of Eau Claire.
Determine Eligibility
To begin the application process, reach out to our division via email or phone call. Our team will help you review the guidelines for each loan program to find the right financing option for your business and will make recommendations depending on factors such as your income, collateral, business type, and intended use of the loan funds.
Complete an Application
When a loan program has been selected, our team will provide the application and next steps. Carefully fill out all sections of the form, gather all necessary documentation listed on the checklist included in the application, and submit all of your materials via email or in person. We will then review all of the materials you provided to ensure they’re complete.
Present to the Loan Board
Once your application is ready, we will invite you to present before the Loan Board. At this meeting, board members will review your application and ask questions so they understand the intended use of the loan funds. They will then deliberate and deliver a decision by the end of the meeting or request more time.
Sign Loan Documents
If your loan is approved, the Finance Department will extend a final offer outlining the interest rate, terms, and conditions of the agreement. Read these documents carefully and ask any questions you have before signing. Then sign and return them to the Finance Department.
Receive Funds
Once the loan documents have been signed, you will receive the loan funds as outlined in the agreement, usually within 1-2 months. Be sure to only use the funds for their intended purpose and adhere to the repayment schedule so you can maintain a positive credit history and avoid any potential penalties or fees.
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