The Rural Development Investment Fund (RDIF) is a financing tool used to promote economic development in rural communities in Washington and Oregon. It is targeted primarily toward industries that Cascadia believes can demonstrate a competitive advantage in the rural areas of this region, specifically:
However, the RDIF will consider any business that can demonstrate a sustainable market niche and the potential to create good jobs in the local area. How do RDIF loans work? The investment is made through the use of a Participation Agreement (PA). This is a low-interest, deeply-subordinated loan with an on-going, revenue-based fee. The fee is calculated in advance of closing, using financial projections negotiated between Cascadia and the company. What are the benefits to the borrower of an RDIF loan? Traditional lenders view the Participation Agreement (PA) debt as equity, allowing the "investment" to leverage additional debt. The simplicity of structuring and closing the deal minimizes attorney fees for both parties. The PA allows for an exit over time. The owner is not forced to sell the company to pay off investors as may be the case with true venture capital. Similar to true equity, the entrepreneur pays a higher rate of return only if the business is growing and successful. If not, the cost of funds is lower. Quick loan facts The maximum loan amount is $500,000. Loan interest rates are typically fixed at 7-9%. Loan terms range from 36 to 120 months. RDIF loans do not need to be fully collateralized. How do I apply for a loan from Cascadia’s Rural Development Investment Fund? For more information, contact RDIF manager Dave Kleiber at (206) 447-9226 ext.101 or dkleiber@cascadiafund.org. He will explain the loan process and help you determine whether an RDIF loan is right for your business.
The investment is made through the use of a Participation Agreement (PA). This is a low-interest, deeply-subordinated loan with an on-going, revenue-based fee. The fee is calculated in advance of closing, using financial projections negotiated between Cascadia and the company. What are the benefits to the borrower of an RDIF loan? Traditional lenders view the Participation Agreement (PA) debt as equity, allowing the "investment" to leverage additional debt. The simplicity of structuring and closing the deal minimizes attorney fees for both parties. The PA allows for an exit over time. The owner is not forced to sell the company to pay off investors as may be the case with true venture capital. Similar to true equity, the entrepreneur pays a higher rate of return only if the business is growing and successful. If not, the cost of funds is lower. Quick loan facts The maximum loan amount is $500,000. Loan interest rates are typically fixed at 7-9%. Loan terms range from 36 to 120 months. RDIF loans do not need to be fully collateralized. How do I apply for a loan from Cascadia’s Rural Development Investment Fund? For more information, contact RDIF manager Dave Kleiber at (206) 447-9226 ext.101 or dkleiber@cascadiafund.org. He will explain the loan process and help you determine whether an RDIF loan is right for your business.
For more information, contact RDIF manager Dave Kleiber at (206) 447-9226 ext.101 or dkleiber@cascadiafund.org. He will explain the loan process and help you determine whether an RDIF loan is right for your business.
Last updated October 2003
