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Business Incentive Programs
Economic Development Assistance Programs from the U.S. Economic Development Administration

As part of the Economic Adjustment Assistance Program, EDA’s regional offices award competitive grants to establish Revolving Loan Funds (RLFs). EDA’s RLF recipient, in turn, disburses money from the RLF to make loans at interest rates that are at or below market rate to small businesses or to businesses that cannot otherwise borrow capital. As the loans are repaid, the grantee uses a portion of interest earned to pay administrative expenses and adds principal and interest repayments to the RLF’s capital base to make new loans. A well-managed RLF award actively makes loans to eligible businesses, continues to revolve loaned funds (interest and principal), and does not have a termination date.

As of April 2011, the RLF program encompassed 575 RLFs, with a combined capital base of $862 million, which represents a 4% increase in the capital base over September 2010 (see RLF table below). The majority of these RLFs reported concentrating on making loans in the range of $25,000 to $175,000, although a number of RLF operators made much smaller (as little as $1,000) or much larger ($1 million+) loans.