A Revolving Loan Fund (RLF) Providing Affordable and Flexible Economic Development Loans to Help Businesses Grow and Create Jobs in La Crosse County.
What is the La Crosse County Revolving Loan Fund (RLF)?
The La Crosse County revolving loan fund consists of three separate funds: A County Fund established in 1992 through the sale of County property, a federal - U.S. Department of Commerce - Economic Development Administration fund established through an economic development grant awarded as a result of the flood of 1993, and State of Wisconsin Community Development Block Grant awards. The County has made numerous loans to businesses through these three funds.
What is the goal of the fund?
The goal of the fund is to foster economic development by providing loans to help businesses grow, create jobs and generate additional tax base.
How will the fund achieve its goal?
The goal will be achieved by providing affordable and flexible loans that leverage other private financing and equity investments that together allow for a business to capitalize a project that under normal lending circumstances would not occur. In all instances the RLF financing will be in conjunction with a larger share of private financing or other investments.
Why is the fund needed?
In order to protect their depositor's asset base, conventional lending institutions prefer equity positions that many businesses cannot meet. New business start-ups in particular have a more difficult time in meeting the needed equity position requirements. One of the principal needs that the County Revolving Loan Fund is addressing is providing affordable subordinate financing so private lending institutions are more willing to soften their equity requirements and participate in economically sound business loans that they would not normally participate in were it not for the RLF subordinate financing. As opposed to charging interest rates of prime plus two to four percentage points that private lending institutions often charge, the RLF will fill a niche by providing more affordable rates. By keeping their financing costs down, the County RLF frees up capital for other needed business needs such as working capital. Based on the County’s diverse economy including tourism, retailing, advanced manufacturing and information technology, it has been determined that the best niche for the RLF is to fill a niche of versatility and flexibility to meet a wide range of business needs.
How is the fund managed?
The La Crosse County Economic Development Fund Corporation, a private nonprofit corporation, created by the La Crosse County Board, serves as the loan board. The Mississippi River Regional Planning Commission (MRRPC) the writer of the grants that created the fund is responsible for administering and providing compliance review services for the fund.
Are There Any Federal Requirements?
Loan recipients are required to adhere to several Federal regulations such as National Environmental Policy Act, Civil Rights Act, Davis Bacon Act, Flood Disaster Protection Act, and National Historic Preservation Act. A certificate of non-relocation is also required. The MRRPC or County staff serving as the RLF administrator will inform the borrower of the above and any other regulations they are required to adhere to in order to secure a loan.
Is There an Application Fee?
A $200.00 processing fee shall be paid with the submission of each RLF application. An additional fee of $400.00 shall be paid at the time of closing to cover additional administrative expenses and future reporting and monitoring costs associated with the loan. For micro loans below $10,000 there is a $30.00 application fee with an additional 5% of the total loan (not to exceed $350.00) if the loan goes to closing. These two fees shall be made payable to the MRRPC.
Who to contact for additional information?
Mississippi River Regional Planning Commission, 1707 Main Street, Suite 435, La Crosse WI 54601, Telephone: (608) 785-9396, Email: plan@mrrpc.com.
Or contact the La Crosse County Community Development Specialist, Administrative Center, Room 2300, 212 6th Street N, La Crosse WI 54601, Telephone (608) 785-5792.
What Standards and Loan Criteria will the Fund Use?
- Loan Sizes - in the $10,000 - $120,000 range are preferred. The maximum loan to a single borrower is $200,000. Micro loans in the $400 - $9,999 range
are also eligible. The RLF Loan Board may adjust this if they feel the economic benefits of a proposed loan merit such an adjustment. - Job Creation - A minimum of one job created or retained for every $10,000 -$15,000 of RLF financing. The RLF Loan Board may adjust this if they feel the
economic benefits of a proposed loan merit such an adjustment. - Loan Ratio - $2 of private or other financing to every $1 of RLF financing is required.
- Participating Lender - money from this loan fund is always in conjunction with a sponsoring senior lender or other investment capital. To apply for a RLF
loan a business must also secure private financing. The sponsoring senior lender will be invited to appear at the County Loan Board meeting to answer
questions concerning the loan and about the need of an inter-creditor agreement. - Equity - each project will require a minimum of 10% equity.
- Uses of Funds - Real estate, working capital, and equipment all are eligible financing uses. Adequate collateral and security requirements will be sought on
all RLF loans. The RLF may take a subordinated position behind a senior lender. - Refinancing of Existing Debt - Existing debt refinancing will be considered if a business can satisfactorily demonstrate such refinancing is necessary to
stay in operation and loss of jobs is a likely consequence if more favorable financing terms are not secured. - Loan Terms - Land and buildings 10-15 years, equipment and machinery expected life, and working capital up to seven years. Balloon payments and a
transition to private financing after an agreed upon timetable are likely to be part of a loan. - Interest Rates - Typically 4-6% based on need and economic conditions.
- Deferred Payments - Initial loan principal payments, if needed, may be deferred up to two years. Interest only
payments are required during the deferred period.
Application Procedure
Interested businesses can complete and submit applications directly to Mississippi River Regional Planning Commission. Applications are processed on a first come first serve basis.
Prior to completing a loan application, contact the Mississippi River Regional Planning Commission (MRRPC) at (608) 785-9396 to see about the amount of loan funds available.
Please submit your application online securely using the button above. Our secure, online application encrypts your personal information including all of your supporting exhibits. Completing your application online will ensure your application is reviewed and handled efficiently.
If you prefer to print and mail your application, use the button below. You may also print and drop-off your application and support exhibits at MRRPC as well.
La Crosse County Economic Development Fund Loan Application Review Process
Upon receipt of a business loan application staff will review it for completeness, if completed satisfactorily staff will prepare a loan board report and schedule a loan board meeting. The applicant and the participating lender are invited and strongly encouraged to attend the loan board meeting. Staff will mail the loan board report comprised of the following to the loan board members prior to the meeting. After conclusion of the loan board meeting the applicant will be informed of the decision on their loan.
Loan Board Report Contents
- Summary describing the overall project.
- Sources and uses of all project financing, terms and security positions.
- Background information on the company and owners.
- Loan collateral analysis table.
- Economic impact analysis in regards to jobs and tax base.
- Key project and market information that makes the loan an acceptable risk.
- Business’s current balance sheet 90 days old or less.
- Business’s current income statement 90 days old or less.
- Business’s current cash flow statement 90 days old or less.
- Pro forma cash flow projections.
- Projected income statements for two years.
- Projected balance sheet for two years.
- Staff verification that the loan applicant has provided the required application materials and explanation on any missing or incomplete items.