RNDC revolving loans up to $250,000 may help some business ventures

The Rural Nevada Development Corporation (RNDC) provides community development assistance to the counties in which it serves by providing access to capital for financing of small businesses throughout rural Nevada.

RNDC lends money for a variety of purposes including, but not limited to, expansion of start-up businesses, to acquire a business, to refinance existing debt, to purchase equipment as well as for working capital.

Loans are available from $500 to $250,000 at a fixed rate of interest but those interest rates are high and vary from 6 percent to 12 percent. Loan terms can vary from one to five years, although certain loans, such as fixed assets, can be amortized for longer periods of time.

RNDC Director Allan Parker said the funding comes from both federal and state grants, but other options are available, too. “We work with a system of banking institutions as well to get businesses financed. Generally speaking, people seeking commercial loans, especially start-up loans, will be declined by banks.”

He said it’s “just the way it works.” Parker has been enabling borrowers and helping them with financial issues for over 12 years. “I’m pretty good at it and I love what I do.”

RNDC has its own set of criteria. To apply, a person must have a business plan, an adequate repayment source and, according to Parker, “have been turned down by a financial institution, such as a turn down letter from a commercial bank.”

“We don’t make the final decision on approving loans but we do counsel people on the aspects of getting a loan approved.”

He said only one-third of those seeking financial help know how to write an effective business plan. “We have tools such as templates that can be downloaded from RNDCNV.org and clicking on the business tab. “There are examples of what a good business plan contains and how to word it. We also have forms available in the office.”

There are other differences between dealing with a commercial bank and trying for a loan through RNDC.

Parker said although RNDC does require collateral, it accepts both business and personal assets. “The down payment will generally be more flexible.”

“Where a commercial bank won’t loan money to start a business, we will.”

He also said a person’s credit score will not “make or break the loan. We do look at the credit score. RNDC just has a lower threshold for loan approval.”

Parker said the point of the program is to be a stepping stone to a better financial relationship with commercial financial institutions.

“The interest rates are high, but we only hold the loans for one to five years. What happens when the loan reaches its term is the responsibility of the person who took out the loan. I will say that if they are responsible and timely with repayments and keep other finances in order, their improved credit score will give them the power to take the loan balance and negotiate with commercial institutions on loan rates as well as approval.”

“This is a revolving loan program, the payments we take go back into the available funds.” He said the grants are renewable as well, so the program can continue.”

He said like commercial lenders RNDC has requirements that must be met. “We also decline loans. About 70 percent of those who come to us won’t be able to get their loan approved, but it will give them tools for future success.”

The local office is at 1301 S. Highway 160 on the second floor of the Nevada State Bank building, or call 751-1947 for an appointment.