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The City of Eau Claire’s EDA Revolving Loan Program is a public financial initiative designed to support commercial and industrial businesses to promote expanded job opportunities at higher wage levels. By offering larger loans, the program encourages businesses to create jobs within the City of Eau Claire while boosting small business start-up and development, creating new tax base within the City, diversifying the economic base of the region, and fostering downtown business and economy growth.
| Minimum Loan | Maximum Loan | Interest Rate |
|---|---|---|
|
$10,000 |
$100,000 |
4% or 75% Prime Rate |
The RLF will target at least one job created or retained for each $35,000 that is loaned. Benefit-eligible positions are encouraged but not required. Created jobs must be full-time and pay at least $15 per hour.
Applicants are required to provide a letter demonstrating the bank cannot successfully invest in the project without the RLF. Overall the RLF will maintain 2:1 leverage at all times.
Interest Rate
The fixed annual interest rate shall not be less than the lower of 4% or 75% of the prime rate listed in the Wall Street Journal. Direct loans may charge higher per the risk.
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 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 18 months would likely lead to the success of the project, deferral may be allowed as approved by the Board. Other loan payment deferrals will be considered on a case-by-case basis.
Collateral
The City will record a lien against the collateral pledged for the loan. Fixed asset loans will be collateralized with the assets purchased. Working capital loans can be collateralized with inventory, fixtures, receivables, or anything else the Board deems necessary. A maximum loan-to-value ratio is 1.00. Personal guarantees will be required for all owners with greater than a 20% stake 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, commercial, service, and creative economy businesses (excluding restaurants), located within the Eau Claire city limits, and those targeted businesses of the City. Industries targeted for growth include medical devises, nano-technology, software development, food production, plastic manufacturing, and computer components. There is also a focus on attracting development of innovation-and knowledge-based technology clusters, as well as creative entrepreneurial activity. Priority will be given to business retention and expansion proejcts.
Eligible Uses of Funds
Purchase of capital equipment, purchase of a facility, new construction, rehabilitation, reuse, and renovation of buildings, and working capital.
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. Subsidizing interest payments on an existing RLF loan. Equity position acquisitions or the borrower’s equiy contributions on other Federal agencies’ loan programs. Investing in interest-bearing accounts or unrelated investments. Relocation of companies located outside the City of Eau Claire.
1) Is the proposed loan and all activities consistent with the RLF Plan?
2) Does the proposed loan application capitalize on existing regional assets?
3) Will the proposed loan support and advance innovation and increase productivity in a particular industry or emerging sector of the economy?
4) Is the potential borrower part of an existing or emerging industry cluster?
5) To what extent will the project leverage private investment that would not otherwise come to fruition without the RLF’s investment?
6) Will the proposed loan result in the creation or retention of higher-skilled and higher-wage jobs?
Get in touch with a team member for more information on how to apply for the Economic Development Administration Revolving Loan Fund.
Mailing Address
203 S. Farwell Street
PO Box 5148
Eau Claire, WI 54702
Hours
Monday: 8:00am-5:00pm
Tuesday: 8:00am-5:00pm
Wednesday: 8:00am-5:00pm
Thursday: 8:00am-5:00pm
Friday: 8:00am-5:00pm
Saturday: Closed
Sunday: Closed
Phone
(715) 839-4914
Fax
(715) 839-4939