Leverage Fund

In order to enhance their community's ability to provide financing for expanding and new businesses, the city of New Boston has passed sales taxes devoted to economic development. This allows them to participate in the Texas Leverage Fund program, which, in effect, offers each community an added source of financing for companies locating in their communities. Funds may be used to finance eligible costs including the purchase of land, buildings, machinery and equipment for manufacturing and industrial operations. Contact:

Bowie County:

Cass County:

Harrison County:

Panola County:

Sabine County:

San Augustine County:

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ATCOG offers several loan programs designed to help in economic development projects. The purpose of the projects is to create and retain jobs in the region.

• The Ark-Tex Regional Development Company, Inc. (ATRDC) is a Small Business Administration Certified Development Company which markets and packages SBA 504 loans under a management agreement with ATCOG. Proceeds from 504 loans must be used for fixed asset projects such as: purchasing land and improvements, including existing buildings, grading, street improvements, utilities, parking lots and landscaping; construction of new facilities, or modernizing, renovating or converting existing facilities; or purchasing long-term machinery and equipment. The 504 Program cannot be used for working capital or inventory, consolidating or repaying debt, or refinancing.

• The Chapman Revolving Loan Fund is an economic development tool for businesses or governmental entities to provide loan funds. The original funds were from a grant from Housing & Urban Development. Former U. S. Representative Jim Chapman was the catalyst for obtaining the funds.

• The Northeast Texas Economic Development District (NETEDD) has a revolving loan fund that is managed by ATCOG. These funds are available for loans in the fifteen counties of the economic district as direct loans to certain manufacturers and commercial entities. Contact: AR-TEX Council of Governments, (936) 832-8636, www.atcog.org

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ETRDC offers several loan programs designed to help in economic development projects. The purpose of the projects is to create and retain jobs in the region.

• SBA 504 Loan Program – The SBA 504 Program is designed to provide long-term, fixed rate financing, to eligible businesses. Loan proceeds can be used for fixed assets such as real estate and long life equipment (10 years of life or more), new construction, and even improvements to existing properties.

• Chapman Loan Program – The Chapman Loan Program (CLP) is designed to provide long term financing to East Texas Businesses in a 14 county area. Loan proceeds can be used for a variety of purposes including invoice and work capital. Proceeds can even be used to help with equity injections.

• Economic Development Loans – The CLP Economic  Development Loan Program is designed to financing to cities, counties and non-profit economic development organizations in a 14 county area. Loan proceeds can be used for infrastructure improvements to assist local businessess. Contact: (903) 984-3989, www.etrdc.com/?page=loans  

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Small Business Administration

SBA offers financial assistance in the form of partial loan guaranties on small business loans made by banks and other commercial lenders. When a loan request does not meet regular lender approval requirements, SBA guaranteed financing can enable the lender to provide financing the would not otherwise be available on reasonable terms.

• SBA Guaranteed 7(a) Loan – 7(a) loans are the most basic and most used type loan of SBA's business loan programs. Its name comes from section 7(a) of the Small Business Act, which authorizes the Agency to provide business loans to American small businesses. All 7(a) loans are provided by lenders who are called participants because they participate with SBA in the 7(a) program. Not all lenders choose to participate, but most American banks do. There are also some non-bank lenders who participate with SBA in the 7(a) program which expands the availability of lenders making loans under SBA guidelines. 7(a) loans are only available on a guaranty basis. This means they are provided by lenders who choose to structure their own loans by SBA's requirements and who apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans. The lender and SBA share the risk that a borrower will not be able to repay the loan in full. The guaranty is a guaranty against payment default. It does not cover imprudent decisions by the lender or misrepresentation by the borrower. Contact: local bank. http://sba.gov/financing/sbaloan/7a.html

• SBA 504 Program – The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses. Typically, a 504 project includes a loan secured with a senior lien from a private-sector lender covering up to 50 percent of the project cost, a loan secured with a junior lien from the CDC (backed by a 100 percent SBA-guaranteed debenture) covering up to 40 percent of the cost, and a contribution of at least 10 percent equity from the small business being helped. Contact: AR-TEX Council of Governments, (936) 832- 8636, www.atcog.org  or East Texas Regional Development Company, (903)984-3989, www.etrdc.com/?page=loans. http://acdc.arcapital.com/504_loan_program/ 

• SBA International Trade Loans – Several loan guarantee programs are available for companies involved in exporting. For more information on the various SBA international trade loan programs, contact your local bank, www.sba.gov/oit/finance/banklist.html#tx

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Texas Loan Programs

• Capital Access Program – The Capital Access Program was established to support the availability of financing for small to mid sized businesses and nonprofit organizations that face barriers in accessing capital or fall outside the guidelines of conventional lending. Use of proceeds may include working capital or the purchase, construction, or lease of capital assets, which include buildings and equipment. Construction or purchase of residential housing and simple real estate investments (excluding those occupied by the applicant's business), are ineligible uses of capital access proceeds. A lender must submit a participation agreement to be considered for eligibility to enroll loans under the program. The borrower must apply for a loan with a participating lender with terms negotiated between the borrower and the lender. Contact: (512) 936-0100, www.governor.state.tx.us/divisions/ecodev/ed_bank/cap_access

• Linked Deposit Loan Program – The Linked Deposit Program was established to encourage lending to historically underutilized businesses, child care providers, non-profit corporations, and/or small or medium-sized businesses located in an enterprise Zone. Use of proceeds may include working capital or the purchase, construction, or lease of capital assets, which include land, buildings and equipment. Loans to start-up businesses are permissible, subject to the lender's normal credit evaluation. The participating lender must be an institution that has been approved by the Comptroller as a State Depository Bank. A borrower must apply with a participating lender who will determine program eligibility. To be eligible, the borrower must be one of the following: a historically underutilized business; child-care provider; non-profit corporation; and/or a small or medium-sized business located within a state enterprise zone. Loans are subject to the lender's normal credit evaluation. Minimum loan amount is $10,000; maximum loan amount is $250,000 with the loan term for no more than the useful life of the financed asset. Participating lenders pay a lower interest rate on the linked deposit received from the State. Contact: (512) 936-0100, www.governor.state.tx.us/divisions/ecodev/ed_bank/linked_deposit/

• Industrial Development Bonds – Cities, counties, and other local governmental districts are authorized to establish nonprofit industrial development corporations or authorities to issue tax-exempt or taxable revenue bonds. Projects must be required or suitable for promoting development and expansion of manufacturing and industrial facilities in Texas. Bond proceeds may be used to finance land, depreciable property, inventory, raw materials, and research-and-development costs. Contact your local chamber of commerce or economic development organization to see if your community offers this program or (512) 936-0100, www.governor.state.tx.us/divisions/ecodev/ed_bank/irb_program

• Product Development Fund and Small Business Incubator Fund – Established as revolving loan programs through a $45 million bond issuance in 2005. The programs support the development of small businesses or eligible products with a statutory preference given in the areas of semiconductors, nanotechbology, biotechnology, and biomedicine. Contact: (512) 936-0100, http://www.governor.state.tx.us/divisions/ecodev/ed_bank/funds

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The Texas Agricultural Finance Authority was created in 1987 as a Public Authority within the Texas Department of Agriculture. TAFA provides financial assistance to creditworthy individuals and businesses. TAFA works in partnership with banks or other agricultural lending institutions through three programs to eligible agricultural and rural businesses.

• Linked Deposit  Program – TAFA can facilitate commercial lending at below market rates to qualified applicants for eligible projects that include: production of an alternative crop; processing and marketing of agricultural crops or livestock; a business that is located in a U.S. Department of Agriculture- or Presidential-declared disaster area; a project using water conservation techniques or purchasing water conservation equipment; and a business loan that will enhance or maintain rural economic development.

• Young Farmer Loan Guarantee Program – TAFA provides financial assistance through loan guarantees to eligible applicants, age 18 to 39 years, who wish to establish or enhance their farm or ranch operation or to establish an agricultural-elated business. The program provides up to a 90 percent guarantee, not to exceed $250,000, to a lender for an eligible applicant. The program also offers a reduced interest rate to eligible borrowers.

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• Small Business Innovation Research Grants (SBIR) – Competitive awards. Available only to start-up and existing small technology-based companies. Eleven participating federal agencies (NASA, NIH, DOD, EPA, etc.) solicit for R&D proposals and award funding to qualified businesses. Companies submit proposals in response to specific solicitations. Agencies make SBIR awards based on small business qualifications, degree of innovation, technical merit, and future market potential.

• Small Business Technology Transfer (STTR) – Competitive awards. Available only to start-up and existing small technology-based companies participating in cooperative R&D with research institutions. Five participating federal agencies (NASA, NSF, DOD, DOE, DHHS) solicit for R&D proposals and award funding to qualified businesses. Companies submit proposals in response to specific solicitations. Agencies make SBIR awards based on small business qualifications, degree of innovation, technical merit, and future market potential. Contact: www.zyn.com 

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Contact Us

The Coordinating and Development Corp.
5210 Hollywood Avenue
P. O. Box 37005-7005
Shreveport, LA 71133-7005
Phone: (318) 632-2022
Fax/TDD: (318) 632-2099
E-mail: info@cdconline.org

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