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Intermediary Relending Program
Success Stories

Iowa  |  Maine  |  Minnesota  |  Oklahoma  |  South Dakota 

For detail information about the program visit the Intermediary Relending Program webpage.
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Iowa:

Outline of Need:
Borrower:   Southeast Iowa Regional Planning Commission
Project:   Revolving Loan Fund
Amount Awarded:   $600,000
Project Service Area:   Des Moines, Henry, Lee and Louisa Counties in SE Iowa

How Rural Development Helped:
Rural Development funds will be used to provide low-interest loans to public and non-profit organizations to relend for business and community development.

The Results:
As a result of this project, 200 jobs were created, 259 jobs saved and 7 businesses were assisted.

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Maine:

Outline of Need:
Wrabacon, Inc. was established in 1986 to design and build food and drug packaging systems for customers throughout the United States. It is located in a rural community with a population of less than 6,000 and an unemployment rate equal to 123% of the State unemployment rate.

The company has approximately 13 employees primarily consisting of highly skilled engineers and technicians with an annual payroll of $600,000+-.

Wrabacon, Inc. has an advantage in the industry in that it has the capacity to both design and build the packaging systems resulting in lower costs, tighter timetable for completion and reduced communication errors. The company’s customers include Kraft Foods, Proctor & Gamble, Ben & Jerry’s, and Quaker Oats Co.

As a design and manufacturing facility, the company is affected by many of the same economic factors that affect its customers. The economic slow down that began in 2001 had a deep affect on the company’s sales and cash flow. With the economic recovery, the company is now experiencing increased orders and sales, and has a need for additional working capital.

How Rural Development Helped:
Using Intermediary Relending Program funds received from Rural Development, the Kennebec Valley Council of Governments provided $150,000 “gap” financing for a term loan to pay down the accounts payable and fund other operations. This financing allowed Wrabacon, Inc. to successfully apply for a $245,000 line of credit from their commercial lender, Peoples Bank.

The Results:
This combination of financing provided Wrabacon, Inc. with the needed working capital to allow continued growth in sales and success of the business.

Because of the business growth and increase in orders, the owners of Wrabacon, Inc. are now contemplating the construction of a 30,000 square feet addition to their existing building which will allow them the needed storage and workspace for the manufacturing of their packaging systems. They expect such an expansion will require an additional 10 to 15 employees.

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Minnesota:

Outline of Need:
The City of Perham, MN is an Intermediary Re-lending Program (IRP) partner with Rural Development. Rural Development has loaned the city $1.75 million to fuel its revolving loan fund for business creation and expansion.

The Results:
City economic developer Chuck Johnson says 34 businesses have received loans through the IRP program, resulting in the creation and/or saving of 482 jobs. Johnson says Perham is highly unique because it has more jobs than residents so its labor shed covers three counties that are home to a number of low income residents. He said, “Rural Development’s business programs have been a contributing factor in Perham’s success.”

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Oklahoma:

Outline of Need:
The Citizen Pottawatomi. Nation project earmarked $750,000 in IRP loan funds will be used to establish a revolving loan fund to serve as an alternative financing source for rural businesses throughout the state of Oklahoma.

The Results:
Potentially over 100 jobs will be created.

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South Dakota:

Outline of Need:
Northeast South Dakota Economic Corporation (NESDEC) has been in operation since 1978 and has been active in the IRP program since its first loan was closed in 1994. NESDEC’s IRP loan program covers 14 counties in South Dakota. Since 1994, they have provided assistance to 720 businesses totaling 1,068 loans. Currently they have 331 active loans totaling more than $8.59 million. NESDEC has been successful in promoting community and economic development in the areas of capital investment, job development, increased tax growth and improving conditions for job and business development especially for under represented groups in rural America. This success is consistent with the purpose of the IRP Program.

The Results:
NESDEC has assisted in creating or retaining 4,316 jobs in its history. History shows that a job has been created for every $5,304 in revolved loan fund expenditure.