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BOD Establishes Revolving Loan Fund

Loans available to businesses, nonprofits, communities in need of low-interest financing

as published in the August 2017 "Energy Lifestyles Magazine"
During its June meeting, the St. Croix Electric Cooperative Board of Directors approved the final conditions and terms needed to secure a United States Department of Agriculture (USDA) revolving loan fund (RLF) with an initial balance of $360,000. The RLF can be accessed by businesses, nonprofits and communities with a need for low-interest financing to expand their business, provide a new service or buy equipment. 

SCEC’s opportunity to establish and manage the RLF presented itself when Pierce-Pepin Cooperative Services, headquartered in Ellsworth, offered to transfer $300,000 of its USDA loan fund to SCEC. Pierce-Pepin used the RLF to help the Village of Ellsworth finance needed improvements to its municipal sewer system in 2006. The loan was fully repaid. 

To acquire the RLF, SCEC needed to provide a 20 percent match to the original $300,000 USDA grant initially awarded to Pierce-Pepin. SCEC’s Board quickly acted on the opportunity to acquire the loan funds. 

SCEC Board Chairman Bill Peavey said assuming ownership of the RLF was an easy decision. 

“Our cooperative already directly and indirectly supports many individual, business and community needs throughout our service area,” he said. “In accordance to our mission statement, our purpose goes beyond providing the best electric service at the lowest possible cost. We also want to enhance the lives of our members and the communities where they live. The RLF is another way to support people and communities throughout our service area.”

Loans made from the RLF are at or below market fixed interest rates. The minimum loan amount is $25,000 and the maximum loan term is 10 years. Loan repayments and interest go back into the RLF to replenish and build the loan fund. Borrowers need to provide adequate loan security and SCEC’s loss liability is limited to 20 percent of any loan. 

Contact St. Croix Electric Cooperative President/CEO Mark Pendergast at for more information about the RLF. Or, access SCEC's Revolving Loan Fund application. 


About the RLF

According to the USDA, the Rural Economic Development Loan (REDL) and Grant (REDG) programs provide funding to rural projects through local utility organizations. Under the REDGrant program, the USDA provides grant funds to local utility organizations, which use the funding to establish revolving loan funds (RLF). Loans are made from the RLF to projects that will create or retain rural jobs. When the revolving loan fund is terminated, the grant is repaid to the USDA. Examples of eligible projects include:

  • commercial and industrial site development;
  • infrastructure construction to include, but not limited to, water and waste-treatment facilities and hard-surface roads in support of commercial and industrial projects;
  • speculative industrial building and incubator construction;
  • direct loans to businesses in support of the purchase of real property, real property development, construction, expansion and/or renovation; 
  • direct loans to businesses for the purchase of machinery and equipment; community projects and projects that provide education and healthcare.

Click here to access SCEC's Revolving Loan Fund application.

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