Bureau of Indian Affairs
BIA Loan Guaranty, Insurance, and Interest Subsidy
Program Purpose
The Loan Guaranty, Insurance, and Interest Subsidy Program guarantees private lenders' loans against loss, thus helping to attract and increase private lending to eligible business borrowers on or near Indian reservations, former reservations, and Alaska Native communities.
Description of Assistance
The BIA will guarantee up to 90 percent of bank loans made to eligible borrowers for business activities on or near Indian reservations, former reservations, and Alaska Native communities. The statutory limit on the guaranties is $500,000 for Indian and Alaska Native individuals, and the policy limit for Indian tribes and Alaska Regional Corporations is $5.5 million. Lenders may not charge more than 2.75 percent above prime. For borrowers unable to fully afford the interest cost, BIA can provide a rate subsidy. In this instance, the borrower must be able to at least afford the Treasury rate; the subsidy would be rebated to the borrower and would cover the difference between the banks rate and the Treasury rate.
Pertinent Geographic Area
This program is available to businesses located on or near Indian reservations or former reservations (e.g., Oklahoma) and Alaska Native communities.
Eligibility
Recipients of guaranteed loans must be businesses organized as for-profit entities predominantly owned and managed by eligible Indians or Alaska Natives. Eligible business owners include Federally recognized Indian tribes, Alaska Native villages or corporations, or members of these tribes or Alaska Native organizations. Businesses must also be able to demonstrate obvious economic benefit to the reservation or Native community, such as jobs and employment.
How to Apply
Application for a loan should be made at the bank of your choice. The bank must apply for a guaranty on forms provided by the BIA. The bank must also make request to BIA for the interest rate subsidies.
Status/Comments
Congress appropriates funds annually. Loans can be guaranteed at any time during the year if funds are available. In fiscal year 1999, funds are available to guarantee $60 million of loans.
