To help small businesses gain access to the financing they need to participate in transportation-related contracts, OSDBU's Financial Assistance Division manages the Short-Term Lending Program (STLP).  STLP provides certified DBE's and other certified small businesses short term working capital financing at competitive interest rates for DOT or DOT funded contracts and subcontracts.

Firms That Can Participate in STLP

The three types of businesses that are eligible to receive a loan through STLP are:

• Firms that have received DBE certification from a state or local transportation agency;
• Firms that have been certified by the SBA as a Small Business; and
• Firms that have received a disability rating by the Veteran’s Administration and have certified themselves as a SDVOSB. 

Start-up businesses are not eligible to receive a STLP line of credit and should contact the SBA for information about other possible forms of financial assistance.

Click here to access your state’s DBE liaison.

Type of Work Covered by STLP

The STLP provides revolving lines of credit to finance accounts receivable arising from “transportation-related contracts.”   “Transportation-related contracts” meet the following criteria:

• Work involves the maintenance, rehabilitation, restructuring, improvement, or revitalization of any of the nation's modes of transportation; and
• Work is for any public or commercial provider of transportation of any federal, state, or local transportation agency. 

Use of STLP Funds

These funds are to be used only to meet the short-term costs of performing the contract(s) being financed.  STLP funds cannot be used for:

• Contract mobilization;
• Equipment purchases or other long-term uses;
• Refinancing of existing debt;
• Payment of non-current taxes; or
• Distributions or other payments to stockholders.

Administration of STLP Lines of Credit

Lines of credit are managed by OSDBU through cooperative agreements between DOT and banks who have agreed to be Participating Lenders (PLs) in the STLP.  The final loan approval is made by both the PLs and DOT. 

Responsibilities of Participating Lenders

Loan documentation and financing transactions are performed directly by the PLs.  The funds are borrowed against each invoice of the contract(s) being financed – up to 85% of the invoice total.  Each invoice is paid directly to the PL (otherwise referred to as “assignment of funds”) by the Project Owner or Prime Contractor via a two-party check addressed to the Lender and the Borrower.  The PL then deducts the payment amount, including interest payments, and remits the remaining balance to the Borrower through their checking and/or savings account. You may view a listing of current PLs across the country here.

Interest Rate on Loans

The interest rate of the line of credit is calculated as defined below: 

• On the first day of each calendar month, determining the current prime interest rate (as published in the Wall Street Journal); and
• Adding 2 percentage points to that rate.

Terms of the Lines of Credit

Normally, the line of credit covers a one-year period.  The applicant has the option of requesting one or more renewals; however, the line of credit cannot exceed five years.  The PL has the option of providing the line of credit for less than one year.  The line of credit amount can be increased during the term if the applicant obtains additional transportation contracts.

Applicants can choose whether they want to set up a checking or savings account with the PL to access their line of credit.

Application Procedures

Loan applications may be downloaded from the STLP page.  The information requested in the loan application includes:

• Business and personal financial statements (3 years);
• Business and personal income tax returns (3 years);
• Cash flow projections (1 year);
• Current Accounts Receivable and Accounts Payable;
• Company profile;
• Resumes of the company’s officers;
• Current Personal Financial Statement (dated & signed);
• Certification that all taxes are current; and
• A minimum of 3 business references.

Applicants are strongly encouraged to work with OSDBU’s Small Business Transportation Resource Centers.  Completed applications may be forwarded to OSDBU or directly to the Participating Lenders (PLs).  For more information of the Short-Term Lendening Program please email STLPinfo@dot.gov.  An up-to-date list of the name and address of each PL can be found on STLP page.