Small Business Lending

Program Description

The Northern Kentucky Area Development District’s Small Business Lending Program, or “Revolving Loan Fund” (RLF), is a publicly administered development capital fund. The program was created to provide a flexible and continuing source of financing capital for small business owners who are unable to obtain sufficient private financing for projects deemed of economic benefit to the area and its workforce. The fund was established through a grant from the Economic Development Administration, U.S. Department of Commerce. The term “Revolving” refers to the fact that RLF capital is replenished as loans are repaid and “revolved” into new loans.

Below is a brief list of RLF features and financing policies:

  • Loan Amounts – The NKADD will consider loan requests of between $10,000 to $100,000. Due to the “revolving” nature of the program, sufficient funds are not always available to lend. Contact the loan fund staff to determine if sufficient funds are available prior to submitting an application.
  • RLF Participation Level – For each loan project, RLF funds shall comprise between 15-50% of the total cost of each project, with the balance financed by private sources.
  • Application Fee – There is no cost to apply
  • Origination Fee – The borrower, once approved, will be charged a two percent (2%) origination fee that will be deducted from the loan proceeds, to help defray the administration costs of the loan.
  • Closing Costs – The borrower is responsible for all closing costs associated with the loan.
  • Interest Rate – Most loans are assigned a fixed interested rate, which is set by the Revolving Loan Fund Committee. Using standard rating criteria, the Committee evaluates loan applicants and their projects as to the probability of their repaying the loan on schedule. The minimum interest rate that may be charged for an RLF loan will be four (4) percentage points below the prime rate. In no event will the interest rate determined be less than four percent (4%).
  • Repayment Terms – Generally, loans shall be repaid in equal monthly installments, including interest and principal. The borrower may repay an RLF loan at any time without prepayment penalty.


To be eligible to apply for a loan through NKADD’s Revolving Loan Fund, the applicant must meet the following basic eligibility requirements.

Business Location
The start-up or existing business must be legally established in one of the eight counties that comprise the NKADD service region: Boone, Campbell, Carroll, Gallatin, Grant, Kenton, Owen, or Pendleton.

Use of Funds
Loans issued through the RLF may finance one or more of the following types of project costs or activities:

  • Purchase of equipment, machinery, and/or fixtures
  • Working capital
  • Land acquisitions and/or site preparation for industrial or commercial uses
  • Building construction, acquisition, or demolition
  • Renovations and/or additions
  • Contingency funds (when appropriate)
  • Other activities

Need for Public Financing
Applicant must be able to demonstrate need for public loan assistance, by providing either a bank rejection letter or a partial commitment letter. The RLF is not in competition with area financial institutions and a borrower will be deemed ineligible if credit is otherwise available on terms and conditions which would permit completion, successful operation and/or accomplishment of the project activities to be financed.

Job Creation or Retention
The successful applicant must clearly demonstrate that the proposed project will create or retain jobs in the area. It is expected that for every $20,000 of RLF funds lent, that one (1) job will be created/retained. Since these projections are based on the assumption that the RLF will generate a substantial level of private investment, the one job per $20,000 invested shall be a requirement of the RLF portfolio as a whole, and not necessarily for each loan project.

Owner Investment
Applicant must invest a minimum of 10% owner cash or equity into the project.

Owners must submit collateral equal to or greater than the value of the loan for which they apply. In order to induce private investment, the NKADD may take a subordinate position as appropriate to the total financing package. Personal guarantees of individuals having 20% or more ownership in the business may also be required. Other personal and corporate guarantees will be obtained if deemed necessary. The NKADD may also require security in the form of insurance (i.e. hazard, key-man, flood, title, and others) and such other additional security as the NKADD RLF Board determines necessary to protect the RLF’s risk exposure.

Personal Credit History
Owners must agree to a credit check. While credit is not the only factor in determining if clients may receive financing, it is a critical element.

Loan Application with Supporting Documentation
The application requirements are similar to those of a traditional lender. To apply, all start-up (new) and existing business must submit the following information. Partial applications will not be considered.

  • Completed NKADD Loan Application (including signed credit check authorizations for all owners with 20% or greater ownership)
  • Business Plan, including Jobs Statement
  • Bank Rejection / Partial Commitment Letter
  • Three Years Income and Expense Projections
  • Three Years Cash Flow Projections
  • Projected Balance Sheet
  • Personal Financial Statement(s) (For all owners with 20% or greater ownership)
  • Last Three Years Personal Federal Income Tax Returns (For all owners with 20% or greater ownership)

In addition to the information above, existing business must also submit the following:

  • Last Three Years Business Federal Income Tax Returns
  • Current (within 90 days) Business Income and Expense Statement
  • Current (within 90 days) Business Balance Sheet

Who does the Program Benefit / What are the Benefits?

The Revolving Loan Fund program benefits the NKADD’s eight-county service region by providing a flexible and sustainable source of public funding for small business owners who cannot otherwise obtain adequate financing through private sources. Besides the direct benefit of providing a necessary source of capital for small business owners, loans made through the RLF program help stimulate the local economy, create and retain jobs, and encourage private investment in the region.

Services Offered for Businesses

NKADD staff, under the guidance and oversight of the NKADD Loan Review Committee and Board of Directors, administers all facets of the program, including coordinating the application process, preparing loan reviews, servicing of existing loans, and reporting on all financial activities of the loan fund.

Downloadable Forms

RLF Information Sheet
RLF Eligibility Requirements
RLF Application
RLF Required Information
Application Checklist
Application Timeline

Contact Information

For more information on the NKADD’s Small Business Lending program, please contact Tara Johnson-Noem, Executive Director at 859.283.1885.