Securing the capital needed to start a new company or expand an existing operation has become increasingly difficult. Responding to that need, OED has developed the Revolving Loan Fund program (RLF) to enhance the ability of business owners like yourself to secure the necessary capital to finance start-up ventures or business expansion projects. This gap financing program works by lending up to 25% of project costs, thereby inducing banks to provide the bulk of the financing for small businesses.

Besides filling the financial gap, the RLF program helps to stimulate job creation and revitalize under-utilized or deteriorated commercial and industrial properties. OED also works to assist businesses that locate in the RLF target area with the permitting process.

Primary Goals

• To create permanent jobs and retain existing jobs for low- and moderate-income Denver residents.
  
  
• To provide economic opportunities in Denver's targeted industrial and commercial areas for new and expanding job intensive industries, including industries owned by minorities and women.
  
  
• To stimulate the redevelopment of under-utilized and deteriorated commercial and industrial property in Denver's RLF target area.

RLF Program Criteria

• The applicant's project must be located within Denver's RLF target area 
  
  
• A majority of the new or retained jobs must be made available to low- and moderate- income Denver residents. These jobs should be entry level or provide adequate training for entry level employees. Job recruitment efforts may need to be targeted to certain neighborhoods and public transportation to the place of business should be adequate. Priority will be given to those loan applications that promote the creation of long-term, full-time employment with good opportunities for career advancement and competitive wages.
  
  
• New equity and new private financing must be maximized, fully committed to the project, and account for at least 75% of total project costs. For minority and women owned businesses, private commitments must account for at least 70% of total project costs.
  
  
• City funding is limited to a maximum of $350,000 for each project, with a target of one job created for each $50,000 in RLF loan proceeds.
  
  
• The applicant must provide sufficient evidence that the amount of funds requested from the City is necessary for the project to succeed.  The evidence may include showing a gap in available financing to cover project costs, the rate of return to the investor(s) is too low, or the project costs related to the site is not competitive with alternative sites.
  
  
• The applicant must demonstrate the ability to repay the City's loan and provide adequate collateral for securing the City's loan.
  
  
• City loan proceeds can be used for a variety of project costs, including real estate acquisition, new construction, rehabilitation, equipment purchases, and working capital. City funds cannot, however, be used for the refinancing of existing debt.
  
  
• Most construction costs funded by the City require payment of prevailing wage rates for construction workers.
  
  
• The interest rate, term, and amortization for the City's loan will be structured to allow for a reasonable rate of return to the investor(s) and adequate cash flow to service project debt.
  
  

Application Procedures

• The applicant needs to contact a Small Business Economic Development Specialist at OED to obtain additional information about the RLF Program, including the requirements for submitting an application for funding. If help is needed in preparing a loan application, the Specialist can refer the applicant to available technical resource centers for further assistance.
  
  
• After the applicant has assembled the necessary information for a complete business plan, the next step is to secure all of the equity and private financing available for the project. The applicant can explain the RLF Program to investors and banks to further induce them to participate in the project.
  
  
• If sources of funding fall short or other economic deficiencies exist in the project, the applicant may submit an application for RLF funding to a Small Business Economic Development Specialist at OED.
  
  
• The Small Business Economic Development Specialist will analyze the loan application and advise the applicant of any deficiencies which need to be addressed. Once an application is complete and meets the criteria for the RLF Program, the Specialist will recommend the application to the loan review committee for approval. The loan approval process takes approximately two weeks after a completed loan application is received.
  
  
• Once the loan application has been approved for funding, the Specialist will request that the City Attorney prepare a formal loan agreement. Upon full execution and satisfaction of the contingencies of the loan agreement by the applicant, a loan closing will be scheduled. Depending upon the complexity of the loan application; the execution of the loan agreement and the loan closing process can take additional four to eight weeks.