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In-State Loan Program

IN-STATE INVESTMENTS  

The objective of the Board’s In-state Loan Program is to diversify, strengthen, and stabilize the Montana economy. Specifically, Montana law states that "the Board shall endeavor to invest 25 percent of the state’s Coal Tax Trust Fund in the Montana economy, with special emphasis on investments in new or expanding locally owned enterprises." To achieve this objective, the Board has designed a series of loan programs that can be tailored to meet the individual needs of borrowers. Although the Board is prohibited by law from making direct loans to businesses or individuals and requires participation of an approved commercial financial institution, Board staff is very interested and willing to work with businesses to assist in developing a loan package to best meet their business needs. >> VIEW AND/OR DOWNLOAD FORMS.

Montana Board of Investments Loan Programs:

Business Loan Participation Program Funded From The Permanent Coal Tax Trust
• Fixed-rate financing up to 25-years with interest rates posted weekly.
• Maximum participation amount of approximately $70 million (10% of Trust).
• Maximum Board participation is 80% if Board loan participation is less than 6% of Trust.
• Maximum Board participation is 70% if Board loan participation is more than 6% of Trust.
• Job creation credits may reduce posted interest rate up to 2.5%.
• Full credit review using Board underwriting policy.
Detailed policy and application: Word | PDF

Link Deposit Business Loan Program Funded From The Permanent Coal Tax Trust
• Fixed-rate financing up to 20-years with interest rates posted weekly.
• Board invests in a one year CD with the lender for the total amount of the loan
• Lender pledges qualifying investments as collateral with State Treasurer.
• CD amount reduced annually commensurate with loan principal pay-down.
• No detailed credit review by Board.
Detailed policy and application: Word | PDF

Guaranteed Loan Purchase Program Funded From The Permanent Coal Tax Trust
• Fixed-rate financing up to 30-years with interest rates posted weekly.
• Board purchases 100% of the guaranteed portion of the loan.
• Job creation credits may reduce posted interest rate up to 2.5%.
• No detailed credit review by Board.
Detailed policy and application: Word | PDF

Value-Added Business Loan Program Funded From The Permanent Coal Tax Trust
• Maximum 15-year loan term.
• 10-14 jobs created/retained qualifies for a loan rate at 4% for 5 years.
• 15 jobs created/retained qualifies for a loan rate at 2% for five years.
• Interest rate will be at the posted interest rate until the required jobs are created/retained.
• Interest rate set at lowest rate for 1st 5 years, 6% for 2nd 5 years the Board posted rate at the time of application for the remaining term.
• Jobs created/retained must be by a business adding value to material/products.
• Board participates with lender in 75% of the funding, risk, collateral, and other security.
• Minimum loan size $250,000-maximum loan size approximately $7.5 million (1% of Trust).
• Total amount available for this program is $70.0 million
• Full credit review using Board underwriting policy.
Detailed policy and application: Word | PDF

Infrastructure Loan Program Funded From The Permanent Coal Tax Trust
• Loans to local government for infrastructure improvement used by basic-sector businesses.
• Business for which infrastructure is provided must create at least 15 full-time jobs.
• Loan sized at number of jobs times $16,666-minimum loan size $250, 000.
• Business pays local government use fee, which is assigned to Board for loan repayment.
• Use fee can be credited against Montana income taxes paid by business, MCA 15-31-301.
• Total amount available for this program is $80.0 million.
• Full credit review using Board underwriting policy.
Detailed policy and application: Word | PDF

Intermediary Relending Loan Program Funded From The Permanent Coal Tax Trust
• Loans made to board-approved local economic development organizations.
• Each loan can not exceed $500,000.
• Applicant must use the Board IRP loan as matching funds toward other government revolving loan funds.
• Interest rate may not exceed 2% for 30 year term.
• Interest only for first three years, then loan is repaid, principal and interest, for the remaining 27 years.
• Application is made by letter to the Board accompanied with the government revolving loan fund application.
• Full credit review using Board underwriting policy.
• Total amount available for the program is $5,000,000.