What is the USDOT's Short Term Lending Program?

News - Published Jul 08, 2013

For businesses interested in participating on transportation-related contracts but lacking the financing required to perform the work, the US Department of Transportation (USDOT) offers a solution in the Short Term Lending Program (STLP).

Through the STPL, firms that are certified as a Disadvantaged Business Enterprise, Small Business Administration Section 8(a), Small Disadvantaged Business, Service-Disabled Veteran, or participates in the HUBZONE Empowerment Contracting Program are eligible to apply for one-year, variable interest rate loans of up to $750,000. Loan recipients can renew the line of credit for a maximum of five years. Moreover, recipients can request increases in the line of credit if they obtain other transportation-related contracts during the term of the loan.

The STPL is also limited to businesses that have at least a three year past performance history. Start up businesses are not eligible to apply for the program.

Additionally, there are restrictions on how recipients can use STPL financing. The line of credit must be used to address the short-term costs of performing work on specific contracts. Funds from the program cannot be applied to expenditures such as contract mobilization, equipment purchases or other long-term uses, refinancing of existing debt, payment of non-current taxes, or distributions or other payments to stockholders.

The program is jointly administered by the USDOT and participating lending institutions located around the country via cooperative agreements.