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Catalog of Federal Domestic Assistance

Program Descriptions

15.124:  Indian Loans: Economic Development

Popular Name:  Loan Guaranty Program

Objectives:  To provide assistance to Federally Recognized Indian Tribal Governments, Native American Organizations, and individual American Indians in obtaining financing from private sources to promote business development initiatives on or near Federally Recognized Indian Reservations.

PROGRAM AND AWARD	FINANCIAL AND INFORMATION CONTACTS
ELIGIBILITY REQUIREMENTS	FINANCIAL AND ADMINISTRATIVE INFO.
APPLICATION AND AWARD PROCESS	INFORMATION CONTACTS
RELATED PROGRAMS	ASSISTANCE CONSIDERATIONS
PROGRAM ACCOMPLISHMENTS	POST ASSISTANCE REQUIREMENTS

15.124 ELIGIBILITY REQUIREMENTS:

Applicant Eligibility:  Federally Recognized Indian Tribal Governments, Native American Organizations authorized by Indian tribal governments, and individual American Indians.

Beneficiary Eligibility:  Federally Recognized Indian Tribal Governments, Native American Organizations, and individual American Indians. Complete information on beneficiary eligibility is found in 25 CFR, Part 103.

Credentials/Documentation:  Individual applicants must submit a certificate signed by Bureau Agency Superintendent or authorized Tribal representative that indicates the applicant is an enrolled member or registered with a Federally recognized Indian tribal government. Federally Recognized Indian Tribal Governments and Native American Organizations must submit a resolution of the governing body of the Indian Tribe. All applicants must demonstrate their inability to obtain financing through the same institutions serving other citizens.

15.124 APPLICATION AND AWARD PROCESS:

Preapplication Coordination:  None. This program is excluded from coverage under E.O. 12372.

Application Procedure:  Applications for loan guarantees should be submitted by the lender at the local Bureau of Indian Affairs Agency or Tribal Loan Administration Office. Lenders should contact the local office for information on documentation needed to complete an application.

Award Procedure:  Action approving or disapproving loans is taken at various levels pursuant to delegated authority. The Bureau of Indian Affairs Regional or Field Office or Tribal Loan Administration Office notifies applicants of action taken on applications.

Deadlines:  None.

Range of Approval/Disapproval Time:  15 to 30 days depending upon completeness of loan package.

Appeals:  An unsuccessful applicant may request an informal conference with the deciding official, or may appeal the denial of the application to the Interior Board of Indian Appeals, or may bring suit in U.S. District Court. Full appeal procedures are found in 25 CFR, Part 2.

Renewals:  Not applicable.

Criteria for Selecting Proposals:  Economic enterprises must demonstrate a reasonable prospect for repayment, must be organized for profit, and be at least 51 percent Indian owned and actively managed. Project must be on or near a federally recognized Indian Reservation. Project must provide economic development to a federally recognized Indian reservation.

Examples of Funded Projects:  A Bureau of Indian Affairs 90% loan guarantee of $5.5 million for a Tribe to construct and operate a tire recycling business, which is one of the first vertically integrated crumb rubber processing facilities in North America. Another example is a BIA 90% loan guarantee of $763,500 for a Tribe's health clinic expansion. This expansion was required to provide the quality and level of services the Tribal members needed. Another example is a BIA 90% loan guarantee of $4.5 million for a Tribe's 96-unit apartment complex expansion. This expansion will assist in diversifying the Tribal economy in the Northern New Mexico region.

Range and Average of Financial Assistance:  For individuals and tribal enterprises, $2,500 to $500,000; $125,000. For Federally Recognized Tribal Governments and Native American Organizations, $10,000 to $7,000,000; $1,500,000.

15.124 RELATED PROGRAMS:

• 10.406 Farm Operating Loans;
• 10.407 Farm Ownership Loans;
• 10.768 Business and Industry Loans;
• 10.766 Community Facilities Loans;
• 11.300 Grants for Public Works and Economic Development;
• 11.415 Fisheries Finance Program;
• 59.012 Small Business Loans;
• 64.114 Veterans Housing: Guaranteed and Insured Loans.

15.124 PROGRAM ACCOMPLISHMENTS:

15.124 FINANCIAL AND ADMINISTRATIVE INFO:

Federal Agency:  BUREAU OF INDIAN AFFAIRS, DEPARTMENT OF THE INTERIOR

Type of Assistance:  Guaranteed/Insured Loans.

Obligations:  (Guaranteed Loans) FY 99 $5,001,000; FY 00 est $5,008,000; and FY 01 est $6,008,000.

Budget Account Number:  14-4415-0-3-452.

Authorization:  Snyder Act of 1921, Public Law 67-85, 42 Stat. 208, 25 U.S.C. 13; Indian Reorganization Act of 1934 (IRA), Section 10, Public Law 73-383, 48 Stat. 986, 25 U.S.C. 470; Public Law 93-262, 88 Stat. 77 through 83, 25 U.S.C. 1451; Indian Self-Determination and Education Assistance Act, Public Law 93-638, as amended, 25 U.S.C. 450 et seq.

Regulations, Guidelines, and Literature:  25 CFR 103.

15.124 INFO CONTACTS:

Regional or Local Office:  Lenders must submit applications to the local Bureau of Indian Affairs agency office as listed in Appendix IV of the Catalog or with the Tribal Government administering the program.

Headquarters Office:  Office of Economic Development, Bureau of Indian Affairs, 1849 C Street, NW., MS-4640, Washington, DC 20240. Phone: (202) 208-4796. Contact: Woodrow Sneed.

(See Appendix IV for more contact info.)

15.124 ASSISTANCE CONSIDERATIONS:

Formula and Matching Requirements:  The maximum percentage of guaranty is 90 percent of unpaid principal and interest. Borrower must have 20 percent equity in business being financed.

Length and Time Phasing of Assistance:  Loan guarantees are limited 30 year terms.

Uses and Use Restrictions:  Loans may be used to finance commercial, industrial, agricultural, or business activities organized for profit. Loan guarantees to private lenders will only be provided if funds otherwise would be unavailable to the borrower. Funds may not be used for speculation. The financial assistance must be used on or near an Indian Reservation.

15.124 POST ASSISTANCE REQUIREMENTS:

Reports:  Lenders will submit quarterly reports on the status of loans to the office that approved the guaranty.

Audits:  Federally Recognized Indian Tribal Governments, Native American Organizations, and tribal enterprises are responsible for obtaining audits in accordance with the Single Audit Act Amendments of 1996 (31 U.S.C. 7501 et seq.).

Records:  Loan records must be maintained for the life of the loan.