Revolving Loan Fund programs are diverse tools that communities can use to support small and mid-sized businesses, environmental remediation and even affordable housing. Revolving Loan Funds are designed to be evergreen as they are maintained by the repayment of principal and grow through interest payments.
Establishing a revolving loan fund provides access to a flexible source of capital that can be used in combination with more conventional sources. Often the RLF is a bridge between the amount the borrower can obtain on the private market and the amount needed to start or sustain a business. For example, a borrower may obtain 60 to 80 percent of project financing from other sources.
Quality RLFs issue loans at market or otherwise competitive and attractive rates. Many RLF studies have shown that access to capital and flexibility in collateral and terms is more important to borrowers over lower then market interest rates. RLF programs should be built on sound interest rate practices and not perceived as free or easy sources of financing. RLFs must be able to generate enough of an interest rate return to replenish the fund for future loan allocations. With competitive rates and flexible terms, a RLF provides access to new financing sources for the borrower, while lowering overall risk for participating institutional lenders.
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Read more about Revolving Loan Funds
DF Perspectives 3: Tips for Managing Your RLF Program
This article provides information on fund capitalization, RLF committee, program marketing, and loan servicing for revolving loan funds. It was written by CDFA and appeared in the third issue of Development Finance Perspectives.
A Guide to Public Sector Business Loan Funds
This report, produced by the National Association of Development Organizations (NADO) Research Foundation and the Development District Association of Appalachia, examines the role of public sector loan funds and includes discussions on best practices
Establishing a Revolving Loan Fund
This fact sheet, produced by the Ohio State University Extension, discusses how to establish a loan fund to encourage small business development in a community. Included in this fact sheet is a discussion on the role of Revolving Loan Funds and the basic steps in establishing a Revolving Loan Fund.
Administering a Revolving Loan Fund
This fact sheet, produced by the Ohio State University Extension, discusses the basics of administering a Revolving Loan Fund. The fact sheet includes advice from application through loan servicing.
The RLF Program Database provides details on loan funds throughout the country. Resources are restricted to CDFA members only. CDFA members must login
with their unique CDFA username and password to access restricted items. Non-members can join CDFA today
to gain access to the entire database. Submit your RLF
for this database.
Revolving Loan Funds can be used to achieve many different community and economic development goals. CDFA has collected over seventy case study examples.
California Rural Infrastructure Finance Guidebook
CALED knows from its work supporting economic development throughout California that infrastructure financing is a challenge for many rural communities. CALED collaborated with CDFA to develop this guidebook to meet the need for a resource to help build capacity in those areas, as well as move economic development projects forward.
Innovative State-Led Efforts to Finance Agricultural ConservationMembers only Login
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U.S. farmers are currently facing the most difficult agricultural economy since the 1980s. At the same time, many states are wrestling with the necessity of addressing environmental challenges. This report expounds upon the excellent work states are doing regarding conservation tax credits, cover crop incentives and environmental certifications to increase conservation across the landscape. The report also highlights how these programs work for agricultural producers and states.
Revolving Loan Fund Reference Guide
The Revolving Loan Fund Reference Guide offers an in-depth look at RLF program development, implementation and management. This guide demonstrates how a RLF program can complement economic development strategies, encourage investment and assist traditionally underserved businesses. With seven case studies of proven RLF programs and over twenty sample documents, policies, and applications, this guide covers the essential elements of operating a successful RLF program.
Practitioner's Guide to Economic Development Finance
The Practitioner's Guide to Economic Development Finance 2nd Edition is the only comprehensive resource dedicated to building and utilizing the development finance toolbox. The Practitioner's Guide provides the insight and practical information needed to critically understand how economic development is financed and the tools, strategies and techniques used to build strong communities. From bonds, tax increment finance and special districts to tax credits, seed & venture capital, revolving loan funds and much more, this Guide outlines the financing tools required for succeeding in today's competitive economic development climate.
Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency
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Unlocking Capital: A Handbook for Becoming a High Performing Development Finance Agency (Handbook) serves as a companion to the Practitioner’s Guide to help illuminate the structures of development finance agencies (DFAs), essential conduits to access development finance tools. The Handbook provides an overview of DFAs and their myriad roles in various development efforts. Included in this discussion is a comprehensive look at over a dozen high-performing DFAs throughout the country. The Handbook is designed to be a starting point for local leaders to engage in the creation or acceleration of a DFA to build and utilize the development finance toolbox.
The Intro Revolving Loan Fund Course
offers an in-depth look at RLF program development, implementation and management. The course demonstrates how an RLF program can complement your economic development strategy, encourage investment and assist traditionally underserved businesses.
The Fundamentals Course
will help you understand the variety of development finance tools available, from bonds, tax credits and TIF, to federal financing programs, RLFs, and access to capital lending resources.
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Weekly Development Finance COVID-19 Briefing
Every Friday through May 29, 2020
1:00 PM Eastern
CDFA will be hosting a weekly briefing about development finance COVID-19 news and resources. These one-hour phone calls will feature legislative updates, news from our members, state and local financing strategies, and lessons learned from previous development finance responses to disasters.
CDFA Federal Policy Conference (cancelled)
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April 14-15, 2020
The federal government plays a critical role in driving private and public investment in innovation, job creation, infrastructure, and community development. With the 2020 presidential election quickly approaching, development finance will be a key policy issue across the nation. The 116th Congress will also play a major role in shaping our country’s economic development policy going forward. It's up to the development finance community to focus the national discussion on smart federal policy, and CDFA is the voice of the economic development finance community on Capitol Hill. For these reasons, CDFA will host its CDFA Federal Policy Conference on April 14-15 in Washington DC.
CDFA EDA Revolving Loan Fund Webinar Series: Revisiting Your Revolving Loan Fund Plan
Designing the Revolving Loan Fund is one of the most critical aspects of the program process. The design process should be thorough and clearly defined to address the goals and objectives of the RLF while also clearly outlining the expectations of borrowers. It’s important to have regular reviews of the RLF program to make sure it is still relevant and effective.
CDFA EDA Revolving Loan Fund Webinar Series: Building Partnerships to Maximize Your RLF Impact
The varying size of Revolving Loan Funds leaves many organizations without the financial and staff capacity to effectively support all aspects of a lending program and building partnerships can enhance its effectiveness and impact. Key partnerships could include providing technical assistance for borrowers, outsourcing the servicing of the portfolio, or even in some cases, partnering with another organization that can assume the management of the entire RLF program. Listen as Robyn Jacobson, Robin Weis, and Andy Rachlin discuss the various partnerships your organization can structure in order to maximize your RLF's impact.
CDFA // BNY Mellon Webcast Series: Capital for Main Street
Whether it is supporting small businesses, investing in historic buildings, or repairing aging infrastructure, Main Street communities need access to capital in various forms. Small downtowns and commercial districts contain a myriad of uses and face unique challenges when using traditional forms of financing. During this installment of the CDFA // BNY Mellon Development Finance Webcast Series, we explored some of the creative financing tools that are being utilized around the country.
CDFA EDA Revolving Loan Fund Webinar Series: Best Practices in Revolving Loan Fund Marketing
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Hundreds of Revolving Loan Fund programs exist nationwide that are underutilized and in many cases unknown to the business and development industry. Marketing the RLF is a critical component in operating a successful program. A RLF agency should consider a variety of outreach methods in their specific community or region that can be employed in a marketing program. Listen Becca Schrader and Robin Weis discussed the best practices and innovative strategies they have learned and developed in marketing their RLF programs.