$34,615,385.00 Is Available In Business Loan Guarantee Authority For American Indian Entrepreneurs

Ada E. Deer, Assistant Secretary for Indian Affairs is thrilled to announce that there is $34.6 million in loan guarantee authority currently available to assist tribal and individual enterprises on or near Indian reservations.

"In 1974, the U.S. Congress passed the Indian Financing Act to assist Indian tribes, Native Alaska groups, and their individual members with financing of business enterprises to develop Indian reservation and tribal economies," Ms. Deer said. "Many tribes credit the loan guaranty program for spurring economic activity in their communities. The loan guaranty program is currently funded with authority to guarantee payment of up to 90 percent of the $34,615,385.00 in loans to eligible Native Americans. Tribal and American Indian entrepreneurs are encouraged to contact a local lending institutions to begin the process for a loan guaranty under this program."

The Bureau of Indian Affairs guaranteed loan program's general requirements are:

• Eligibility - A borrower must be a Federally recognized Indian tribe or Alaska Native group, or American Indian ( an enrolled member of a federally recognized Indian tribe or Alaska Native group), or a business organization with no less than 51 % American Indian ownership. The business must be on or near an Indian reservation.
• Loan Purpose - must be to finance American Indian and Alaska Native owned commercial, industrial, agriculture or business activity organized for profit.
• Loan Amount - A maximum of $5.5 million to a tribe or tribally owned business, and $500,000 to individuals or business entities other than tribes.
• Equity Requirements - a minimum of 20% of project funding in either cash or unencumbered assets to be used in the proposed business is required.
• Terms of Loan - maturity is determined by lenders making the loan and is based on the type of loan, (e.g., manufacturing, retail, construction, seasonal, etc.) and the applicant's repayment capability, except 30 years is the maximum maturity term. • Loan Guaranty - the percentage of a loan that is guaranteed is the minimum necessary to obtain financing, but may not exceed 90% of the unpaid principal and interest on the loan.
• Application Procedures - The applicant should work directly with a BIA approved lender and use the lenders' loan application and security documents. The applicant must have a fully completed business plan which demonstrates fiscal responsibility and sound management capability. The lender must initiate the request for a BIA Loan Guaranty. Complete guidelines can be obtained by referring to Title 25 of the Code of Federal Regulations Part 103, or contacting the local BIA Area Office, see listing below.
• Initiation Request - Requests for BIA loan guarantees may be submitted to the appropriate BIA Agency or Area Office at any time during the fiscal year (October 1 - September 31) but approval is always subject to availability of funds.

"Loan guarantees have helped to finance Indian-owned business in construction, cattle ranching, commercial fishing, air carrier charter services, shuttle bus services, convenience/grocery stores, charter and sightseeing, hotel/conference centers, office building rentals, bulk fuel stations, and others," Nancy Jemison, Director of the Office of Economic Development said.