Indian Loan Guaranty, Insurance, and Interest Subsidy Program

The Indian Loan Guaranty, Insurance and Interest Subsidy Program is aimed at assisting economies of reservation or service areas to obtain financing from private sources, with a goal of promoting business development initiatives in these historically financially distressed areas. There are certain requirements that you must meet before you can qualify for assistance from this program. These include:

• You must be an individually enrolled member of a Federally- recognized American Indian tribe or Alaska Native group.
• Alternatively, the applicant must be a corporation with a membership of Federally- recognized American Indians or Alaska Natives that is no less than 51 percent.
• The applicant must be a Federally-recognized American Indian tribe or Alaska Native tribe.

If you fit into any of these three categories, you may be eligible for a loan under this program, although your approval will be decided after you have submitted your loan application. The Indian Loan Guaranty, Insurance, and Interest Subsidy program is aimed at facilitating financing for borrowers, while at the same time securing reasonable interest rates and reducing risks for all the parties involved. The program breaks through the conventional barriers for tribal financing and their corporations. The government offers up to 90 percent guarantee on the loans, allowing businesses access to both small and large business loans, plus startups and refinancing options.

The Division of Capital Investment manages this program and ensures that financing is available to groups that would otherwise not have access to financing. The Division of Capital describes what it does as follows:

• Forms strategic partnerships that are beneficial to the economy of the reservation areas, and the people living in those areas.
• Helps optimize resources, in a way that is both beneficial and sustainable for all parties involved.
• Facilitates access to capital, to groups who need the capital and who may, under normal circumstances, be unable to access credit elsewhere.
• Provides outreach efforts, in order to ensure information and financing reaches the groups that need such access.
• Fosters entrepreneurship, by making financing available to American Indians and Alaska Natives who may be looking to start and manage their own businesses.
• Brings business opportunities to reservations, with an aim of helping the groups living in the reservations become self-reliant and productive.

There are different forms that must be completed by the lending institutions for this program. These are:

• Notice of Insured loan
• Loan Assignment
• Loan Guarantee Agreement
• Request for Loan Guaranty, Insurance and Interest Subsidy
• Notice of Default
• Claim for Loss
• Loan Insurance Agreement
• Interest Subsidy Report

For prospective borrowers who may not qualify for the Indian Loan Guaranty, Insurance, and Interest Subsidy Program, a business cash advance from an alternative lending company may provide working capital solutions in 24 hours or less.