Despite what you may think, the government did not really try to help small businesses next to nothing, it is not for the financial industry. This is true regardless of the ruling party.

Most of the discussion in this area is about the Small Business Administration and other federal programs. This makes sense because this is also where most of the funds performed. That does not mean there is no other choice. Revolving loan fund options are often available at local and state level.

Revolving loan funds are usually granted to businesses that are unable to secure a loan from a traditional source such as bank or other financial lending institutions. RLFs are offered at an interest rate that is lower than what a bank or the SBA would offer. Though the interest rates are generally lower, the final terms of RLFs will depend on the particular business that is seeking the loan. RLFs are similar to a line of credit in the sense that repayments made on the loan are put back in fund that can be accessed as a loan again.

RLF’s are set up by local governments with a not for profit motive. This is why they are able to provide interest rates that are typically lower than commercial loans. That being said, they can only cater to some forms of businesses that are in need of help. Some of the most important criteria are mentioned below

• The business must be locally owned and the loan should be able to expand the business in such a way that it can create jobs

• The business must employ a good percentage of its workforce from the local labor pool

• A business might be awarded a RLF if it plans to use the funds to develop land or real estate in the local area

• RLFs will also help out local businesses that are unable to buy expensive equipment that might be the key to staying competitive and in business. Hi tech firms can approach the local governments for RLF’s.

• Economically disadvantaged groups and certain minority groups such as women, immigrant minorities may also qualify for a RLF depending on the state’s policy.

Local governments are very particular about job creation when awarding a RLF. The general understanding is that one job will have to be created for every $10,000 that is given out as RLF funding. Lower loan amounts will not require collateral although even RLFs will require collateral for large loan amounts that are in excess of $100,000.

Finding business financing these days is all about being creative and looking outside the traditional financing box. Revolving loan funds are one source most businesses overlook. Don’t make this mistake. An inexpensive loan is something to be cherished these days.