Business Development Loan Fund

The revolving loan fund is owned and operated by Davis Council of Governments Inc. a 501(c)3 entity. This fund was established in 1984 using federal community development block grant funds. Today, the program is funded via past loan repayments. This program is a tool used to promote business growth and expansion with a primary focus on job growth. The following information describes the basic elements of the program:

Davis County helps administer this fund; therefore applications for loans are available at the Davis County Department of Community and Economic Development offices at the Davis County Courthouse in Farmington, room 219.

Or call (801) 451-3278 and we'd be happy to mail or fax you the application form.

The purpose of the fund is to provide "gap financing" to establish businesses located in Davis County to assist with their growth and expansion. Gap financing is defined as the difference between the total project cost, the owner's/partner's contribution and what has been borrowed from a lending institution (bank). This loan fund is not designed to fund 100 percent of the project cost but to supplement lending provided by commercial lenders. This Fund will not be the prime lender of any project. Verification of other financing/investment or attempts to obtain financing for the project will be required.

In order to determine the viability of the company, three years of financing statements and/or tax returns are required. A proforma and business/marketing plan is also required. Financial statements must indicate the company has been profitable for two years and cash flow analysis must indicate the company will have the ability to service the debt over the length of the loan.  Collateral and personal guarantees are required to back the loan.

Loan terms and interest rates are negotiable but are generally established at market rates such as prime plus one or two or current bank loan rates. This is NOT designed as a low interest loan program.  All principal and interest will be repaid within 5 years but the loan can be structured with balloon payments, interest only with sliding scale principal payments, etc.  The loan terms are negotiated around the business’s needs.

Personal guarantees are always required.

Any Davis County business qualifies for the loan provided they are located in Davis County and remain in Davis County during the term of the loan.  If the business leaves Davis County any unpaid interest and principal is called due.

A major requirement in the loan approval process is the creation of NEW jobs and the retention of existing jobs. This may require a periodic review of employee records to determine compliance.

Financial information provided by applicants is kept confidential.

This revolving loan fund is managed by the Office of Community and Economic Development and all loans are approved via an eight person committee comprised of mayors, county commissioners and one at large representative.  The committee meets the 3rd Tuesday of every month.

A fee not to exceed 1 1/2 percent of the loan amount is charged on all loans.