department of commerce, community, and economic development

DIVISION OF ECONOMIC DEVELOPMENT

Department of Commerce, Community, and Economic Development

Presented ByCathy Jeans, Division Operations Manager

April 4, 2012

DEPT. OF COMMERCE, COMMUNITY, AND ECONOMIC DEVELOPMENT

Division of Economic

Development

Financing Section Development Section

AVAILABLE LOAN PROGRAMS

Division of Economic Development

Small Business Economic

Development

Rural Development Initiative Fund

Commercial FishingCapstone Avionics

Fisheries Enhancement

How Large is Alaska?

Alaska’s Size• At 591,000

square miles, Alaska is as wide as the lower 48 states and larger than Texas, California and Montana combined.

SMALL BUSINESS ECONOMIC DEVELOPMENTREVOLVING LOAN FUND

PURPOSETo provide private sector employment by financing the start-up and expansion of businesses that create significant long-term employment.

To provide financing to small businesses in Alaska who are unable to obtain private financing for the entire project.


ELIGIBLE AREASEligible areas includes all communities in the state of Alaska with a population of less than 30,000.

Loans in communities of 30,000 or more are available on a limited basis, depending on funds availability.


GENERAL REQUIREMENTS• Loans must result in the creation or retention of jobs

in an eligible area.

• Applicants are required to match loan funds with cash or other private, non-public financing. The private match will be 1.5 times the loan amount requested.

• Costs incurred prior to receipt of the application may not be used to meet the match requirement.


GENERAL REQUIREMENTS• Loans may not be made if a private lender is

willing to finance the entire project.

• Applicants must supply a turn down letter from a recognized lender listing the reason(s) for denial.


TERMS AND CONDITIONS• Maximum Loan Amount:

• $300,000 per project

• Maximum Loan Term:• 20 Years – fixed assets• 5 Years – working capital

• Fixed Interest Rate: • Prime – 4.0%; • 4.0% floor

• Loans will be adequately secured


TERMS AND CONDITIONS• Loans may be in a subordinate lien position to

associated private sector loans.

• Assets purchased with loan proceeds must be offered as collateral for the loan.

• Personal guarantees are required of all persons holding 20% or more ownership interest in the business receiving the loan.

RURAL DEVELOPMENT INITIATIVE FUND

PURPOSETo provide private sector employment by financing the start-up and expansion of businesses that create significant long-term employment


ELIGIBILE AREAS• Loans may be made to a business located in an

Alaskan community with a population of:

• 5,000 or less, that is not connected by road or rail to Anchorage or Fairbanks

• 2,000 or less, connected by road or rail to Anchorage or Fairbanks


GENERAL REQUIREMENTS• Loan must create new jobs or

retain existing jobs.• Loans may be made for

commercial real estate, working capital, equipment or other commercial purposes.

• Non-state funding must be a part of the total project cost.

• Loans may not be made to pay costs that were incurred more than 6 months before receiving the loan application.


TERMS AND CONDITIONS• Maximum Loan Amount:• $150,000 per person• $300,000 for 2 or more people

• Maximum Loan Term:• 25 Years

• Fixed Interest Rate: • Prime – 1.0% • 4.0% floor

• Adequately secured

COMMERCIAL FISHING REVOLVING LOAN FUND

PURPOSETo promote the development of a predominantly resident fisheries and vessel & gear upgrades for the purpose of improving the quality of Alaska seafood products.


GENERAL REQUIREMENTS• Alaska resident for the past

2 years

• No past due child support

• Recent fishing experience in Alaska

• Economic dependence on fishing


TERMS AND CONDITIONS• Maximum Loan Amount:

• $300,000 or less, varies by program

• Maximum Loan Term:• 15 years

• Fixed Interest Rate:• Prime + 2% on most loan types• Prime – 2% on PQI loans, floor 3.0%• Prime – 2% on engine fuel efficiency

loans, floor 3.0%

• Priority lien required on item being purchased with loan proceeds


LOAN TYPES• Limited Entry Permit purchases

• Vessel• Purchases• Refinances• Product Quality Improvement• Engine fuel efficiency upgrades

• Gear purchases

• IFQ purchases

• Tender • Product Quality Improvements

• Past due IRS taxes

ALASKA CAPSTONE AVIONICS LOAN PROGRAM

PURPOSETo provide long-term, low interest loans for the purchase and installation of avionics equipment related to Capstone and FAA’s NextGen program for aircraft that operate in Alaska.

STATE OF ALASKABUSINESS RESOURCES

Division of Economic DevelopmentSmall Business Assistance Centercommerce.alaska.gov/ded/dev/smallbus/home.cfm

Economic Development Resources & Publicationscommerce.alaska.gov/ded/dev/econdev/econdev.htm

Establishing a Business in Alaskawww.commerce.state.ak.us/ded/fin/EstablishingABusiness.pdf

Other Programs and Linkscommerce.alaska.gov/ded/programs/html

http://www.commerce.alaska.gov/ded/dev/smallbus/home.cfm





http://www.commerce.alaska.gov/ded/dev/econdev/econdev.htm





http://www.commerce.state.ak.us/ded/fin/EstablishingABusiness.pdf

http://www.commerce.alaska.gov/ded/programs/html



STATE OF ALASKABUSINESS RESOURCES

DIVISION OF ECONOMIC DEVELOPMENT

OFFICES:Anchorage: Atwood Building (550th West 7th Avenue)Juneau: Vintage Business Park

1-800-478-LOAN

Please visit us at:commerce.alaska.gov/ded/fin/index.cfml

department of commerce, community, and economic development

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