Welcome to

   The Northwest Arkansas

Economic Development District, Inc.

NWAEDD Plaza 818 Highway 62-65-412 North

 P.O. Box 190 Harrison, Arkansas 72602-0190  (870) 741-5404   FAX (870) 741-1905

The Revolving Loan Fund (RLF) of the Northwest Arkansas Economic Development District was initially created through a grant from the United States Department of Commerce, Economic Development Administration (EDA) for the purpose of assisting in the economic development of the nine counties of the Northwest Arkansas District, including Baxter, Benton, Boone, Carroll, Madison, Marion, Newton, Searcy and Washington.

Because of the nature of federal funding, there are particular requirements that must be met to secure loan funding under this program.  The following are brief descriptions of some of these requirements.

Jobs Creation - One job must be created for each ten thousand dollars ($10,000) of loan funding from the Revolving Loan Fund.  Although the general requirement is that this must be a newly created job, under some circumstances the retention of an existing job may qualify.

Capital Formation - The Revolving Loan Fund is designed to be a source of financing which fills the gap in project financing that is not available from existing, local financial funding sources.  The fund is also designed to provide gap financing which attracts and leverages capital investment participation from local financial institutions and other investors, at a minimum level of 50 percent.  Current regulation allows the private sector participation to take the form of Act 9 Industrial Revenue Bonds.  Sufficient equity is also recommended to provide a minimum of two private dollars for each one dollar provided through RLF financing.

Types of Activities - The Revolving Loan Fund is designed to assist small business development, including expansions and start-ups of locally owned businesses.  RLF Loans may be used to finance the acquisition of real estate, buildings, equipment, inventory, accounts receivable, or working capital.  Special emphasis is placed on those projects and activities which create the highest value added to the economy.  Typically, those projects which focus on expanding industrial or manufacturing capacity, encourage the formation of new technologies, growth industries and/or high technology firms will receive higher ranking for the limited available RLF funds.  Additionally, emphasis is placed on the development of businesses owned and operated by minorities, women, and members of economically disadvantaged groups.

A potential borrower is eligible for RLF assistance only when credit is not otherwise available under terms and conditions which would permit the successful completion, operation, and/or accomplishment of the project activities.

Prohibitions - By law, the Revolving Loan Fund is specifically precluded from providing assistance which would relocate jobs from one labor area to another.  The Fund may not make loans which would potentially create any conflicts of interest between the potential borrower and the lender.  Loans from refinancing of existing debt, or the speculation or investment in stocks, interest-bearing securities, or real property are prohibited.  Activities financed under the Fund are prohibited from discrimination and must meet all requirements of civil rights, access for the handicapped, protection of the environment, and certain other federal mandates.

Terms and Rates - The Revolving Loan Fund may make loans with a term of from two (2) to ten (10) years. Because new loans are made from the collected proceeds of previous loans, requests for funding with shorter terms will generally receive priority.  The rate of interest charged is fixed for the term of the loan and may range from a minimum of four percent (4%) less than the New York Prime, up to the maximum rate allowed by law.  The normal rate charged is four percent (4%) above the Federal Discount Rate.

Collateral - The Revolving Loan Fund normally provides assistance in conjunction with local financial institutions, and requires a shared first-lien security position with the private lender in the acquired assets.  In addition, the Fund may require personal guarantees, the pledging of additional security, or such other collateral as required to adequately protect the investment of federal funds.

Other Requirements - The operation of the Revolving Loan Fund has certain other requirements which are set forth in the loan application and through ubsequent loan agreements.  Details of such requirements will be provided in the normal progression of loan processing.

Interested potential applicants should contact J. Michael Norton, Executive Director of the Northwest Arkansas Economic Development District, to discuss the availability of funding, the application process, and the potential merits of the project.

For additional Information or Assistance Contact:
Mike Norton - NWAEDD Executive Director - (870) 741-6718