Originally Posted Apr. 3, 2020
AIDEA offers two loan programs for Alaskan small businesses to help finance the start-up and expansion of businesses that will create significant long-term employment.
Note, these programs are not new but could be potentially be utilized by businesses to help bridge the income gap caused by COVID-19. AIDEA has also committed to make up to $50,000,000 available for loan guarantees to Alaska’s banks and financial institutions under the new AK SAFE for the duration of the COVID-19 emergency disaster as proclaimed by Governor Mike Dunleavy. As well as increasing the program cap to $1,000,000,000. The objective is to enable Alaska’s banks and financial institutions to immediately provide additional capital to Alaska businesses through their existing relationships as they continue to manage terms with those Borrowers.
Small Business Economic Development (SBED)
This is a loan program offered by AIDEA to assist in financing small business start-ups or expansions that will create significant long-term employment. Though companies must have previously been denied loan funds from a bank, this program can provide funding that will cover up to $300,000 of a businesses' costs.
Interest rate: Fixed rate generally below 6%
Loan Maturity: Maximum term of 20 years for fixed asset loans and 5 years for working capital loans
Matching?: Yes, MUST match with cash or other private, non-public financing
Collateral?: Yes
To learn more or apply, go to: https://www.commerce.alaska.gov/web/ded/FIN/LoanPrograms/SmallBusinessDevelopment.aspx
Rural Development Initiative Fund
This second loan program offered by AIDEA focuses on providing private sector employment by financing the start-up and expansion of businesses that will create significant long-term employment. A business can utilize this loan program if doing so will create new jobs or retain existing jobs. Businesses can borrow up to $150,000 to a person (or up to $300,000 to two or more people) to help cover costs incurred no earlier than 6 months before the loan application as well as new costs incurred by the business.
Interest rate: fixed 4% (as of 4.15.2020)
Loan Maturity: Maximum term of 25 years
Matching?: Yes, MUST match with cash or other private, non-public financing
Collateral?: Yes
To learn more or apply, go to: https://www.commerce.alaska.gov/web/ded/fin/loanprograms/ruraldevelopmentinitiativefund.aspx