Revolving Loan Funds

Revolving loan funds can be a source of start-up funding. Low-interest loans are made to eligible recipients. As borrowers pay off their loans, those interest payments and repaid principal become the source of new loans to other recipients. In that way, the money “revolves” through various projects.

The Pew Charitable Trusts urged Congress in February 2017 to establish a flood mitigation state revolving loan fund to “enable more communities to take measures to reduce risk to structures and infrastructure, such as elevating buildings, putting vents in the lowest level of structures to reduce pressure on the walls and allow floodwater to pass through, and fund larger-scale projects such as improving stormwater management and building berms or flood walls.”