EUREKA REDEVELOPMENT AGENCY

DESCRIPTION:

The City of Eureka CDBG Revolving Business Loan Fund (RLF) is designed to provide no more than one-half of a projects total financing requirements. The RLF will provide only the funds necessary to bridge the “financial gap” that allows the project to move forward. It is targeted to businesses and projects that have the greatest potential for long-term job creation/retention, particularly jobs created and/or retained for low income persons.

USE OF FUNDS:

RLF proceeds can be used to finance:

Inventory Purchase
Equipment Acquisition
Working Capital/Lines of Credit
Real Property Acquisition
Furniture/Fixtures

ELIGIBILITY CRITERIA:

A business that is assisted must be a small business as defined by SBA. It must provide at least 51% of the permanent jobs created for low and moderate income people. The loan must create/retain one permanent full-time equivalent job for every $20,000 of RLF injected into the program. All loans are subject to Council approval.

FUNDING
LIMITS:

Loans range from $5,000 minimum to $50,000 maximum. The maximum amount of the RLF loan may be exceeded on a case by case basis. However, RLF loans above $50,000 will require additional approval by the State Department of Housing and Community Development (HCD).

TERM:

Term of loan is linked to the First Deed of Trust call, or a ten year maximum, depending on the asset being financed, the “financial gap”, and the demonstrated need for the RLF funds.

INTEREST

RATE:

Interest rate is linked to the City’s current earnings on investments, as determined by City staff at the time of RLF loan commitment, and fixed for the duration of the loan.

PREVAILING WAGE:

As of January 1, 2002, payment of prevailing wage is required for all construction projects

FEES:

$250. This fee is for costs not paid with CDBG grant funds or program income.

COLLATERAL:

All RLF loans shall be fully secured by collateral in order to maintain the RLF Program. No unsecured loans shall be made. Types of collateral may include:

Liens on real property
Deeds of Trust
Liens on machinery, equipment, or other fixtures
Personal and/or corporate guarantees, as appropriate
Other collateral, as appropriate.

CONTACT:

Eureka Redevelopment Agency
City of Eureka
531 K Street, Room 203
Eureka, CA 95501
707.441.4209 FAX 707-441-4138
ctrobitz-thomas [at] ci [dot] eureka [dot] ca [dot] gov