Revolving Loan Fund Loans

Revolving Loan Funds (RLF) loans serve as gap financing for private businesses unable to obtain traditional financing. Interest rates are typically 9 to 10%.

The Headwaters Fund contracts with two local financial institutions Arcata Economic Development Corporation (AEDC) and Redwood Region Economic Development Commission (RREDC) to administer its loan program. Eight million has been allocated to this fund.

Loan Guidelines

To be eligible for a RLF loan you must have been denied by a commercial bank. Loan applicants apply directly to AEDC and RREDC. Typical loans have interest rates from 9 to 10% (to compensate for additional risk) and require sufficient collateral and projected cash flows. Loan sizes range from $50,000 to $800,000 and up to $1,600,000 in special cases. Headwaters Funds are used for 50% of the loan and are matched by other sources provided by the lenders.

Eligible Use of Loan Proceeds

  • Equipment and machinery
  • Inventory
  • Leases
  • Product development
  • Real estate purchase, construction and rehabilitation
  • Working capital

Economic Criteria for Loans

Projects must lead to job creation or retention. Projects must meet or exceed the job-to-loan ratio of 1 full time job created or retained for every $35,000 loaned. Exceptions to this requirement are possible if the project can demonstrate a sufficiently high economic value to the County.

Projects must fit with the broad vision outlined in the County’s Comprehensive Economic Development Strategy. Namely, projects must create or retain jobs, contribute to the economic vitality of the region and enhance the productivity of industry clusters or supporting industries.

Application Process

The Headwaters Fund does not accept direct applications for RLF financing. Interested parties should contact the following lenders for information and application details:

  • Arcata Economic Development Corporation (AEDC)
    100 Ericson Court, Suite 100A
    Arcata, CA  95521
    Phone: 707-822-4616
    AEDC Website
  • Redwood Region Economic Development Commission (RREDC)
    520 E Street
    Eureka, CA  95501
    Phone: 707-445-9651
    RREDC Website


It is strongly recommended that you discuss proposal ideas by emailing the Headwaters Fund Executive Director or by phone at 707-445-7745 prior to submitting a full proposal.