THE TARP PROGRAM
The Taft Area Revolving Loan Program (TARP) was established in 1995 to provide financing to new and existing businesses in Taft. The intent of the program is to create a healthy economic environment for job creation. The program is funded through grants from the State of California Community Development Block Grant (CDBG) Program. As TARP loans are repaid by area businesses, funds are available for additional loans thus providing a continuing source of financing for Taft area businesses.
LOAN AMOUNT
TARP loans range from $5,000 to $50,000 depending upon the needs and the financial strength of the applicant. Higher loans are available but require special approval from the State of California. Since TARP loans are considered as “gap” financing, all other sources of capital, including commercial loans, owner equity, and personal funds will be considered and evaluated during the loan approval process.
TERMS
TARP loans range from one to five years, but may be longer depending upon the proposed use of funds and the needs of the borrower.
RATES
Interest rates for TARP loans vary between market and below market rate depending upon the proposed use of funds and the needs of the borrower.
FEES
A $250.00 loan origination fee is due from the borrower upon acceptance of the conditional loan approval.
PAYMENT
Payments are due on the first day of every month. There is no pre-payment penalty.
THE PURPOSE
TARP loan proceeds can be used for:
- Working Capital/Credit Line
- Inventory/Equipment Purchase
- Commercial Property Purchase
- Leasehold Improvements
- Loan Down Payment/Fees
- Loan Consolidation/Refinancing
- Business Acquisition
- Loan Guarantees
Examples of ineligible uses for a TARP loan are new construction or re-construction/remodeling.
PURPOSE AND OBJECTIVES
As the TARP loan program was developed to provide “GAP” financing (between the borrowers equity and commercial financing) and promote jobs in our local economy, the loans must meet the “necessary and appropriate” test as defined by the Community Development Block Grant Program (CDBG). The City’s goal is to help the small business community grow and expand and to assist in the creation and/or retention of jobs in the Taft area.
THE PACKAGE
Business Plan including a market analysis and marketing plan.
Business Financial Statements including cash flow projections, profit and loss statements, proforma balance sheets, break-even analysis and tax returns.
Job Creation Agreement agreeing to comply with the job creation requirements of the Community Development Block Grant Program. Providing one full time employee for every $35,000 borrowed. 51% of jobs created must be for employees from the Targeted Income Group (TIG).
Owners must have between 10% and 25% equity in the project.
Additional Documents personal financial statements, tax returns, credit reports and resumes for all principals of the business seeking finance.
THE PROTECTION
TARP loans may be secured with collateral of various types. Potential sources of collateral include business property, business equipment/fixtures, business inventory, personal property or other appropriate assets. TARP loans can take a second position to private financing when collateral is offered.
Taft Small Business Assistance Center
The City of Taft Small Business Assistance Center offers free information and referrals for no-cost business counseling in the following areas:
- Permit Requirements
- Business Planning
- Creative Financing
- Financial Analysis
- Marketing
- Advertising
- Public Relations
- Government Procurement
- Contract Bidding
- Personnel Management
- Taxation
We have a complete range of U.S. Small Business Administration pamphlets to help you with just about any business questions you may have.
