RBEG
The RBEG Loan Program:
Are you thinking about starting a
small business or expanding your existing small business? Help is
available from the Human Services, Inc. Revolving Loan Fund, which was launched
in 2010.
The program’s funding sources are:
·
Rural Business
Enterprise Grant: U.S. Department of Agriculture Rural Development Office.
·
Heritage
Fund – the Community Foundation of Bartholomew County.
·
MainSource
Bank.
Job creation is the priority of the program,
which has active loans throughout H.S.I.’s service area of Bartholomew,
Decatur, Jackson, Johnson and Shelby counties.
Among the requirements of loan applicants:
- A rejection letter from a traditional lending source
- On-line training
- Consultation with either SCORE or the Indiana Small
Business Development Center
- Collateral to cover the loan, plus a 10 percent
personal equity investment
- A Business Plan
- Financial projections and two years’ tax returns
- Periodic reports on employment and financial
performance
The RBEG program targets economic development and job
creation in rural areas. Parts of
Johnson County do not qualify as "rural,” but residents might qualify for a BEED loan. (See accompanying
BEED article).
The loans, which are 5 percent interest over five years, are
for purchasing equipment or vehicles, inventory, outfitting a shop or
workspace, start-up expenses – or other expenses that would lead to creation of
a job. Loan maximums are $7,500 for a start-up and $20,000 for an existing
business. Amount of loans will vary according to the amount of "revolved” funds
available.
The loans are not intended for payroll, cash flow, refinancing existing debt or
general monthly overhead. Ineligible enterprises include those dealing with
political or religious activities, real estate, investment, gambling or those
that might be considered offensive to community standards.
The program is funded by the USDA Rural Development Office and Heritage Fund –
the Community Foundation of Bartholomew County and MainSource Bank.
About
the Revolving Loan Fund:
Who is eligible?
The RBEG program focuses on micro-businesses of up to 50 employees. Large portions of Johnson County do not
qualify as "rural.” Those potential clients should check first: they may be in
an eligible area, or they may qualify for a BEED loan.
What’s available?
Maximum loans are $7,500 for a start-up business; $20,000 for expansion.
What are the terms?
Terms depend on the individual loan and amount, but generally the interest rate
will be 5 percent and the term is five years. Collateral is required and each
loan applicant must have a 10 percent equity investment in the loan.
Are there other requirements?
All Human Services, Inc. programs stress self-sufficiency elements. The
Revolving Loan Fund requires mentoring and on-line class work before loans are
considered.
What are the mentoring requirements?
Mentoring is available in our five counties from two sources at no charge:
SCORE: the Service Corp of Retired Executives.
- Indiana Small Business Development Center: Advisors who
are assigned to each county and available for consultation.
Additionally, Human Services, Inc.’s
loan fund manager will advise applicants throughout the process.
What are the training requirements?
Training comes in two parts:
- Personal finances: refresher information on
budgeting, planning, savings, managing money, credit and other basics
available on MoneyManagement.org
- Business Finance: on-line courses on soinbiz.com
(Southern Indiana Business) covering starting a business, accounting,
marketing and the business plan.
Are there other requirements?
Successful applicants will be expected to provide follow-up reports quarterly
on the progress of their enterprise and the number of employees hired.
How can I get additional information?
Contact the H.S.I. Loan Fund manager at 1-800-296-8026.
