A bank will lend you 70% of what the project needs. You have 10% in cash. Who covers the other 20%? In many towns and counties, the answer is a revolving loan fund.
What a revolving loan fund is
A revolving loan fund (RLF) is a pool of money a local or regional organization lends to businesses. As loans are repaid, the money goes back into the pool and is lent again, which is why it "revolves."
The largest federal source is the U.S. Economic Development Administration (EDA). EDA lists about 400 RLF operators and $1.3 billion in total investment through its RLF program. The funds are run by local governments, Tribal governments, nonprofits, economic development districts, councils of governments and similar groups. Many cities, counties and states also run their own funds.
What they are for
EDA describes its RLFs as gap financing for small businesses that can't get traditional bank loans, to help them grow and create or keep jobs. In practice, an RLF loan often sits alongside a bank loan, filling the part the bank won't cover. RLFs are meant to add to bank lending, not replace it.
Common uses include equipment, building improvements, working capital and business expansion. Each fund sets its own loan sizes, rates and terms, and many have job-creation or location requirements.
Why they're worth a call
They often accept more risk than a bank, such as less collateral or a shorter history.
Their goal is local jobs, not just yield, so terms can be patient.
A gap loan can be the piece that gets the bank loan approved.
How to find one near you
Download EDA's list of RLF recipients, which shows each organization's city, state, website and lending area.
Call your county or city economic development office and ask what local loan funds they run or know of.
If you're already talking to a bank, ask whether it has worked with a local RLF on a shared deal.
Have your numbers ready: the total project cost, what the bank will lend, what you're putting in, and how the business repays both loans.
Sources
U.S. Economic Development Administration: Revolving Loan Fund program (checked November 14, 2026)
Congressional Research Service: Economic Development Revolving Loan Funds (updated November 3, 2026)
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