LAMPASAS — The Lampasas Economic Development Corporation is considering a plan to pursue a revolving loan program through the U.S. Department of Agriculture to stimulate area growth and support local businesses.
City officials last week updated the LEDC board on their loan program research, which included USDA development opportunities.
“USDA has a little more oversight, with funds available to an EDC for a revolving fund loan,” City Manager Finley deGraffenried said. “One thing the board may want to consider doing is acquire more points by working with businesses and visiting with other organizations that already have this loan program in place.”
USDA relending program loans are designed to lend money to intermediaries, who in turn provide loans for community development projects or business facilities. Eligible intermediaries include public bodies, nonprofit corporations, Native American tribes and cooperatives.
Typical USDA loans are between $50,000 and $100,000 and awarded on a point scoring system, city officials said. Government guidelines stipulate the projects be in rural areas and excludes cities with populations of more than 25,000.
“I think what the board needs to ask is, does a tool like this have some benefit to local businesses?” deGraffenried said. “Whatever we put up is the match in terms of X number of dollars, and then the USDA funds kick in.”
EDC board members discussed the benefits and risks of the venture. They agreed that a criteria had to be defined for business owners if the city undertakes the gap financing plan.
“We’ve obviously got a little more research to do, but we’ll continue down that path unless you tell us to put the brakes on,” deGraffenried said.