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Community Development Block Grant for Economic Development Revolving Loan Fund (CDBG-ED/RLF)

Successful local development projects depend on effective partnerships. In pursuing their economic goals and objectives, many Wisconsin communities have used the CDBG-ED program to help businesses structure financial packages necessary for a start-up or to expand present operations. These loans, when repaid directly to the community, are used to capitalize a community Revolving Loan Fund (RLF).

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  Overview

Within recent years, RLF's have grown dramatically in number and use:

  • Over 190 Wisconsin communities are involved in the RLF program
  • These communities have already received over $90 million from CDBG-ED loan repayments and expect to receive over $130 million.
  • The local RLF loan portfolio now exceeds $95 million.
  • There are more than 1,200 local RLF loans.
  • The average local RLF loan is about $75,000.
  • Cash reserves available for loans to existing and new business exceeds $50 million.

  Regional Revolving Loan Fund Pilot Project

Commerce launched the new Regional Non-profits Initiative in 2005 as a pilot program to encourage the voluntary consolidation of local community business revolving loan funds in order to more effectively deploy underutilized economic development resources. At that time, there were 200 such RLF funds statewide, with over $50 million cash on hand. Commerce selected two potential pilot regions - the Northwest and West Central areas. Under Commerce oversight, counties and communities in both regions worked collaboratively on developing viable models for the regions that ensure fair representation and sound investment strategies. The Northwest Wisconsin Regional Economic Development Fund has completed its first successful year of operation. The West Central Regional Business Fund is just getting off the ground with participation of 28 of the 31 RLFs in the seven-county area.

Advantages to consolidation are many - the most compelling being that Commerce allows the regions to defederalize the funds, enabling more creative and responsive uses of the RLF funds. Participation in a regional RLF is completely voluntary. If your county or region is interested in the regional revolving loan initiative, contact Amy Young Cumblad at 608 266- 2688 or amy.cumblad@wisconsin.gov.

  Department of Commerce Newsletter articles

  Community Opportunities

By providing communities a source of flexible, low-cost gap financing for small businesses, CDBG-RLFs have been a successful means of assisting communities in carrying out their economic development goals and objectives.

The Department of Commerce RLF Technical Assistance Program assists communities in the administration of their RLF programs. Site visits are provided by the Department upon request to assist communities with any facet of their RLF program.

Commerce also offers a Revolving Loan Fund Handbook. This includes an "Administrator's Guide" which "walks" the administrator through the process of the creation and capitalizing of a RLF program from marketing, application process, credit evaluation, approvals, to loan closing and documentation, as well as performance monitoring of the loan. It also includes the forms necessary for administration, closing and documentation.

  Business Advantages

Advantages to businesses are very attractive "tailor-made" loans, which may include deferred payments, and reduced interest rates. These loans are typically smaller loans which can be more efficiently administered at the local level. Questions regarding local CDBG-ED/RLF loans should be made to your local Revolving Loan Fund contact person.

Questions regarding the CDBG-ED program should be referred to the local Area Development Managers. Department of Commerce, 201 West Washington Avenue, P. O. Box 7970, Madison, Wisconsin 53707.

  RLF Administrators 

Support resources are available here.