Luce County EDC

The revolving loan fund is a particularly strong asset in our development program.  The fund was capitalized initially with a $2 million payback of UDAG and CDBG funds that were received by Louisiana Pacific Corporation as part of that company's location to Newberry in 1983-84.  McMillan Township, the recipient of the UDAG payback, and Luce County, the recipient of the CDBG payback, entered into an Interlocal agreement to form the revolving loan program.  In addition, revenues from the Forest Management Demonstration Program (PA214) were included as a part of this program.  It was agreed that the County Economic Development Corporation would administer the RLF program.

The loan funds are to be used for expansion of existing enterprises and in the development of new industrial or commercial activity in Luce County.  Funds may be used for any purpose approved by the EDC Board, Luce County Board, and McMillan Township Board provided the purpose is a Title I eligible activity and due account is given to the degree of risk.  A portion of jobs created by a revolving  loan fund financed project must be made available to low and moderate-income persons.  Lending decisions are made based on a thorough review of all documents provided, including the viability of the business presented in the business plan and the credit history shown in a commercial credit report.  Interest rates and repayment terms are established based on factors such as the rate and term of a participating financial institution, impact of monthly payments on cash flow, amount of owner equity in project and nature of financing (real estate, equipment, working capital).

A comprehensive set of administrative guidelines have been developed for revolving loan programs.  Because the fund is governed by Title I, certain public sector financing projects are permitted and the loan fund has done several public projects over the course of its existence.

The revolving loan fund currently has 14 active loans totaling $937,224.27.  The fund has an excellent portfolio mix and our default rate is good considering the overall goal of the EDC.  The goal of any revolving loan program is to make good projects go forward, create jobs, and increase business activity in an area.  The Luce County loan fund program  has accomplished this.