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1 1 (June 09, 2020)

handle is hein.crs/govddxw0001 and id is 1 raw text is: Researh Sevice COVID-19: EDA Revolving Loan Funds for Businesses June 9, 2020 Economic development revolving loan funds (RLFs) use funding from federal grants and other sources to make loans to local businesses and in limited circumstances to communities for infrastructure and development projects. The Economic Adjustment Assistance (EAA) program-administered by the Department of Commerce, Economic Development Administration (EDA)-is a source of RLF funding. The Coronavirus Aid, Relief, and Economic Security (CARES) Act (RL. 116-136) provided $1.5 billion in supplemental funding for the EAA program, which can be used for RLF grants, among other activities. RLFs can make loans to targeted types of businesses or areas, such as economically-distressed communities; specific industries, like healthcare or manufacturing; underserved markets; Opportunity Zones; or areas impacted by natural disasters. This Insight describes EDA's RLF program, how it could potentially be used to address COVID-19 pandemic-related business credit needs, and the temporary RLF program changes made in response to urgent circumstances. An Overview of EDA's EAA Program for RLFs Businesses cannot directly access EDA grants and many other federal economic development grants. Instead, eligible businesses may receive a loan from one of the approximately 400 organizations administering EDA-funded RLFs. These organizations include Regional Development Organizations, local governments, states, non-profit organizations, educational institutions, and Indian Tribes. (Businesses may also receive direct technical assistance through projects funded by EDA grants.) Federal programs and other funding sources provide grants or loans to RLFs to capitalize the fund and cover administrative expenses (see CRS In Focus IF 11449, Economic Development Revolving Loan Funds (ED-RLFs) for more detail). RLF borrowers include businesses, units of local government, and non-profit organizations in a targeted lending area or industry. RLFs are revolved-meaning future loans can be made when previous borrowers repay principal and interest. Interest rates may vary by program because the EDA regulations allow RLF administrators to set an interest rate that is appropriate, as long as it is above one of the two minimum interest rate standards. Congressional Research Service https://crsreports.congress.gov IN11418 CRS NS GHT Prpred For Meumbers and Comrm ttees of Conress ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

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