The purpose of the RLF is to provide credit enhancement to participating banks to facilitate the financing of business and industry in the 9 county region served by CADDA, resulting in a positive economic impact through the creation and/or retention of jobs.
- RLF Counties: Bryan, Bulloch, Camden, Chatham, Effingham, Glynn, Liberty, Long, McIntosh
Loan Structure (typical)
Bank: 45%
CADDA: 45%
Borrower: 10%
(The bank and CADDA have a shared 1st lien on the collateral)
Maximum/Minimum Loan Amount
The maximum loan amount is $500,000 (total loan request) and the minimum is $10,000 (total loan request).
Rate/Term
The interest rate for the loan is determined by the bank. (CADDA may, in some instances have a lower rate, however, its floor is 4%.)
The term/amortization is determined by the useful life of the assets. One loan may be provided for all project assets using a “weighted average life”.
- Land/Building (20 years)
- Machinery/Equipment (up to 10 years)
- Working Capital (up to 7 years)
Eligible Uses of Proceeds
- Acquisition of land
- Construction of new building
- Renovation of existing structure
- Leasehold improvements
- Machinery & Equipment
- Working Capital
- Inventory
Types of Eligible Businesses
- For-Profit
- Owner must be a legal, U.S. resident
Job Creation
One permanent job should be created or retained per $20,000 of CADDA funds loaned. If fewer jobs are created/retained, the project must demonstrate a high positive impact acceptable to CADDA.
Benefits: Improved Loan Quality-CADDA’s participation reduces the lender’s credit risk.
- Reasonable Interest Rates & No Loan Fees-CADDA establishes the interest rate at a rate equal to or less than the bank’s interest rate. There are no fees for CADDA’s participation.
- Longer Terms-CADDA’s participation may encourage longer repayment terms, which reduce the borrower’s debt service and improve operating cash flow.
- New Customers-The RLF creates and/or retains jobs, which translates into additional customers for the private lender and new jobs for the community.
- Low Down Payment-CADDA’s participation may reduce down payments, thereby increasing working capital of the customer.
- Quick Response-The loan can be closed and funded shortly after CADDA BOD approval.
- No prepayment penalty– The borrower will pay no penalty for prepaying the loan on the CADDA portion.
- Loan Servicing Assistance-CADDA’s staff also assists the bank in servicing the loan.