REDEC Micro Loan Program

REDEC Relending Corporation Micro-Loan Program

The REDEC Relending Corporation micro loan program was established in 2000 with grant funds received from the USDA Rural Enterprise Grant Program. The goal of the micro loan program is to provide affordable financing to eligible start-up and expanding businesses located in Chemung, Schuyler and Steuben Counties of New York State. The micro-loan program was established by REDEC for the people of our region as a result of a demonstrated need for financing small projects.

Loan Policies and Eligibility Criteria

Eligible Applicants:

Eligible businesses shall include small manufacturers, tourism-based businesses and other industries in Chemung, Schuyler and Steuben Counties which tend to import dollars into the region by selling goods and/or services to outside concerns.

Ineligible Applicants:

Officers, Board Members, Staff or Blood Relatives of any of the above representing REDEC or RRC for a period of one year after leaving REDEC/RRC.

Eligible Projects:

Loan proceeds can be utilized for projects that result in small business start-up or expansion, redevelopment of vacant businesses, business and job retention, modernization or rehabilitation of existing industrial and manufacturing facilities and utilization of new technologies.

Eligible Activities:

Acquisition and/or improvement of land, building, plant and equipment; including new construction or renovation of existing facilities; demolition and site preparation; and working capital.

Ineligible Activities:

Speculative activities; purchase or finance equity in private business; debt consolidation or refinancing; relocation out of the 3-county region.

Maximum/Minimum Loan Size:

$25,000 maximum based on availability of funds. $2,500 minimum.

Matching Private Investment Required:

At least 50% of the total project cost must be otherwise provided by the applicant. Applicant must demonstrate a minimum of 5% equity into the project.

Interest Rate:

Interest rate will be determined at loan approval.

Loan Terms:

Three to five years for working capital. Five to seven years for machinery/equipment; seven to ten years for real estate.

Collateral:

The micro-loan fund may accept a subordinated collateral position. Personal guarantees will be required.

Job Impact:

One full-time (37.5 hours) equivalent employee for every $15,000 loaned.

Fees:

$250 non-refundable loan application fee. 2% loan service fee. Borrower is responsible for all closing costs.

Payment Schedule:

Loan payments due the first day of each month. Late fee assessed after the 10th of each month.

Code Compliance:

Required.

Environmental Audit:

All applicants must demonstrate compliance with local, state and federal environmental requirements. Projects involving real estate must provide a current environmental audit.

Targeting Criteria:

Job Creation/Retention.

All loans must comply with the requirements of Federal and State laws concerning civil rights, the environment, flood protection insurance and access for the physically handicapped.

RRC ensures confidentiality of all applicants and does not discriminate against any applicant because of race, color, religion, sex, or national origin.