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Establishing a Business in Alaska

Establishing a Business in Alaska

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Published by Chuck Achberger

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Published by: Chuck Achberger on Nov 13, 2009
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Agricultural Revolving
Loan Fund

Alaska Department of Natural
Resources
Division of Agriculture

1800 Glenn Highway, Suite 12
Palmer, AK 99645-6736
Phone: (907) 745-7200
Fax: (907) 745-7242

Website:

http://www.dnr.state.ak.us/ag/ag_arlf.ht
m

The “Agricultural Revolving Loan
Fund
” (ARLF) has provided funding for
farm development, product processing,
equipment, livestock, and annual
operating needs of Alaska’s farmers
since 1953. The purpose of the program
is to foster growth of viable agricultural
enterprises for resident farmers,
homesteaders,

partnerships,

or
corporations located in the State of
Alaska. Loan interest rates are a fixed
rate comparable to other agricultural
lending institutions. Depending on loan
purpose and repayment capacity of the
borrower, loan terms may be up to 30
years. Loan authority rests with a seven-
member board that meets monthly to
consider loan requests and other loan
related actions.

Alaska Industrial
Development and
Export Authority

813 West Northern Lights Blvd.
Anchorage, AK 99503
Phone: (907) 269-3000
Fax: (907) 269-3044

Website: www.aidea.org

107

The “Alaska Industrial Development and
Export Authority
” (AIDEA) is a public
corporation of the state that provides
financing assistance for economic
growth in Alaska. Financing assistance
provided by AIDEA range from working
capital loan guarantees for small
businesses to multi-million dollar ports
that are owned by AIDEA. Businesses
and projects financed by AIDEA must
be economically feasible and able to
demonstrate the ability to repay debts;
and must enhance the economy of the
state, providing or maintaining jobs for
Alaskans.

Through its financing assistance
programs AIDEA plays a key role in
meeting the state’s need for long-term
commercial financing. AIDEA’s
programs help provide liquidity to
financial institutions, extend the term of
the loan for the Alaskan business, and
support private sector investments.
Under AIDEA’s loan participation and
guarantee programs, a bank must
originate loans. AIDEA does not
provide direct loans.

Under AIDEA’s Development Finance
Program, AIDEA has the ability to own
a specific project or portion of a project.
The AIDEA-owned projects are leased
to and operated by private sector users.
Typically, the projects provide
infrastructure support for private sector
resource development and utilization.
Examples of projects owned by AIDEA
include the DeLong Mountain
Transportation System (road and port
serving the Red Dog Mine), the Federal
Express Aircraft Maintenance Facility,
and Snettisham Hydro Project.

Alaska Division of
Investments

DCCED

Alaska Division of Investments
P.O. Box 34159
Juneau, AK 99803-4159
Phone: (907) 465-2510 or
(800) 478-LOAN (5626)
Fax: (907) 465-2103

Website:

www.commerce.state.ak.us/investments

Alaska Division of Investments
550 W. 7th

Ave. Suite 1650
Anchorage, AK 99501-3568
Phone: (907) 269-8150
Fax: (907) 269-8147

The Alaska Division of Investments
(ADI) offers loans for commercial
fishing, fisheries enhancement, and
small business economic development,
as well as assumptions on existing loans
under a number of loan programs.
Further information may be obtained by
contacting the Juneau or Anchorage
offices.

Commercial Fishing Revolving Loan
Fund

Commercial fishing loans are available
for various purposes at prime plus two
percent (up to a maximum of 10.5
percent) for a maximum 15-year term.
All loans must be secured by adequate
collateral. A reduced interest rate of
prime minus two points is available
under Sections A, B, and F for gear or
vessel upgrades that improve product
quality.

Section A loans may be made to

108

eligible commercial fishers for the
purchase of Alaska Commercial
Fishing Limited Entry Permits or to
upgrade existing vessels or gear to
improve the quality of Alaska
seafood. To qualify an applicant
must have been an Alaska resident
for the two year period immediately
preceding the date of application
and have three years of commercial
fishing experience during the past
five years including the most recent
season. The maximum loan amount
is $300,000.
Section B loans may be made to
eligible individuals to purchase
limited entry permits or to
purchase, repair, or upgrade vessels
or gear. To qualify an applicant
must have been an Alaska resident
for the two year period
immediately preceding the date of
application and must be denied
financing by a private sector
lender. In addition, applicants must
either be economically dependent
on commercial fishing for a
livelihood and consider fishing a
traditional way of life or live in an
area that does not have
occupational opportunities
available other than commercial
fishing. The maximum loan
available is $100,000.
Section C loans may be made to
eligible individuals to purchase
halibut or sablefish quota shares.
To qualify an applicant must have
been an Alaska resident for the two
year period immediately preceding
the date of application and must be
denied financing by a private sector
lender. In addition, applicants must
have held a limited entry permit or
crewmember license and actively
participated in a fishery for two of

the past five years. The maximum
loan available is $300,000.
Section D loans may be made to
eligible commercial fisherman to
satisfy past due federal tax
obligations. To qualify an
applicant must have been an Alaska
resident for the two year period
immediately preceding the date of
application and be current on tax
filings with the federal government.
The maximum loan available is
$30,000.
Section F loans may be made to
eligible individuals to upgrade
existing tender vessels and gear to
improve the quality of Alaska
seafood products. This is a new
program that goes into effect
October 25, 2005. To qualify, an
applicant must have been an Alaska
resident for the two-year period
immediately preceding the date of
application. The maximum loan
available is $300,000.

Existing commercial fishing
vessel and gear loans
made by
other lenders may be refinanced.
To qualify an applicant must have
been an Alaska resident for the
two-year period immediately
preceding the date of application.
The maximum loan amount is
$300,000.

Rural Development Initiative Loan
Program

This program was established in 2000 to
provide financing to small businesses
creating jobs in rural communities. The
fund is owned by AIDEA and serviced
by ADI through a servicing contract. To
qualify a business must be located in a
community with a population of 5,000 or
less that is not connected by road or rail

109

to Anchorage or Fairbanks, or in a
community with a population of 2,000 or
less if connected by road or rail to
Anchorage or Fairbanks. In addition,
the loan must result in the creation of
jobs and the applicant must provide a
portion of the project funding. The
interest rate charged is prime minus 1
point with a minimum rate of 6%. The
maximum loan amount is $100,000
although two or more individuals may
combine their eligibility on a project and
borrow up to $200,000.

Fisheries Enhancement Loan
Program

Loans may be made to qualified regional
and non-regional private nonprofit
corporations that have obtained a permit
from the Alaska Department of Fish and
Game. Loan proceeds can be used to
plan, construct, and operate fish hatchery
facilities or to engage in other salmon
enhancement activities in the State. The
interest rate is prime plus one point not
to exceed 9.5%. The maximum loan
available is $10 million.

Small Business Economic
Development Revolving Loan Fund

This program was established in 1987 in
conjunction with the U.S. Department of
Commerce, Economic Development
Administration (EDA). The fund is
owned by the AIDEA and administered
by ADI through a servicing contract.
The purpose of the program is to provide
private sector employment in the areas
designated by EDA. Applicants are
required to obtain additional private,
non-public financing of at least twice the
amount requested and must be denied
financing by a private sector lender. The

interest rate charged is prime minus 4
points with a minimum rate of 4 percent.
The maximum loan amount is $300,000.

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