Revolving Loan Fund

Goals

The principal goal of the Revolving Loan Fund Program is to provide low interest loans to the private sector, to promote economic development and thereby, increase employment opportunities in the South Texas Development Council region.

Objectives

  • To stimulate and to increase commercial activity in deprived areas within the STDC region.
  • To promote and to expand minority enterprise opportunity within the STD region.
  • To advance small business contribution to economic growth within the STDC region.

Identification of the Area’s Financing Problems

The Revolving Loan Fund Program is needed to address specific voids in financing services to certain sectors of the economic and/or providing financing assistance which is not currently available and which cannot be supplied by existing area lending institutions.

The South Texas Development Council’s Overall Economic Development  Program (Volume I, pp. 156-158) financial resources section indicates a continuous increase in bank deposits, however, the available lending capacity is not adequate to meet the current needs, coupled by conservative lending policies, result in local finance problems. The need to expand available financing is identified in the South Texas  Economic Development Organization’s Minority Business Development Program.

The Revolving Loan Fund Program provides a “fill in” for shortages of Investment funds available within the STDC region.

The “borrower eligibility criteria” and the “loan selection criteria”, (p.5&6, * , E&F) relates to the local financing problems by keeping eligibility to those entrepreneurs not being serviced by the existing lending institutions.

Targeting

The South Texas Development Council is an EDA designated redevelopment area and Economic Development District composed of four counties, Jim Hogg, Starr, Webb and Zapata.

The STED Corporation has been created to serve these four counties in implementing the Revolving Loan Fund Program. As a result high unemployment in the entire four county region, and lack of venture capital and/or financial assistance for business and industry, the four county economic development district is eligible for participation in the Revolving Loan Fund Program. However, target areas within each county have been identified.

In no case, will Revolving Loan Fund assistance be provided to borrower located outside of this area. Furthermore, the STED Corp. reserves the right to recall any and all loans made to borrowers who relocate outside the Revolving Load Fund Program.

Borrower Eligibility Criteria

  • Borrower must secure private funding to leverage RLF dollars on a 2-to-1 ratio
  • Proof of participation from a private funding institution.
  • Loan repayment capability
  • Proof of owner’s personal injection

Eligible Uses for the Proceeds

The eligible uses for the proceeds of the loan include:

  • Equipment
  • Capital Expenditures/Inventory
  • Working Capital

The STED Corporation

The STDC through the STED Corporation manages the Revolving Loan Fund (RLF) Program. The RLF provides low interest loans to the private sector, to promote economic development and thereby, increase employment opportunities in the South Texas Development Council region. The RLF program’s goals and objectives are to stimulate and to increase commercial activity in deprived areas within the STDC region, to promote and to expand minority enterprise opportunity within the STD region, and to advance small business contribution to economic growth within the STDC region.

The South Texas Development Council is an EDA designated redevelopment area and economic development district composed of four counties, Jim Hogg, Starr, Webb and Zapata. The S.T.E.D. Corporation has been created to serve these four counties in implementing the Revolving Loan Fund Program.

Robert Mendiola

Executive Director

Robert Mendiola

Executive Director

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