For over 45 years, the Indian Loan Guarantee and Insurance Program (ILGP), has helped to reduce the risk to lenders who offer loans to American Indian and Alaska Native (AI/AN) tribes and individuals through the financial support of the federal government.
Our Division of Capital Investment (DCI) manages the program and can provide up to a 90% guarantee or insurance for loans.
The loans provided by ILGP are not offered through the Small Business Administration (SBA). For information about SBA-guaranteed loans, please visit the SBA website.
Eligibility and Lending Requirements
Most lending institutions, including Community Development Financial Institutions, may obtain a guarantee or insurance, provided they regularly make and evaluate business loans. Credit unions are generally not eligible to become ILGP approved lenders. Non-bank lenders (such as insurance companies, leasing agencies, and private wealth funds) that otherwise meet ILGP’s standards are eligible to access guarantees, but not insurance since they are not financial institutions.
Loans may be used for a variety of purposes including:
- Operating capital
- Equipment purchases
- Acquisition and refinancing
- Building construction and lines of credit
A lender must ensure that a business entity is qualified and only apply for a loan guarantee or obtain loan insurance when it would not otherwise approve the borrower’s loan application.
If the loan will be used for refinancing, construction, renovation, or demolition work, there are additional requirements.
All required information can be provided using the lender’s own forms, along with a commitment letter from the lender to the borrower that states the loan amount, purpose of the loan, the interest rate, the schedule of payments, the security, and the terms and conditions of the loan.
The following types of businesses are ineligible for ILGP loans:
- Smoke shops
- Vape shops
- Businesses whose substantial purpose is to cultivate, prepare, package, transport, distribute, or sell tobacco or vaping products
- Breweries, wineries, or distilleries making products with over 20% alcohol by volume
- Brothels or other businesses involving prostitution
DCI will provide no more than a 90% guarantee or insurance for loans.
The maximum loan amount guaranteed for individuals is $500,000, but we’re able to guarantee loans of greater amounts for tribes, tribal enterprises, or business entities, subject to program and policy limitations.
Loan insurance, primarily for loans of $250,000 or less, is at the discretion of the lender. If a lender believes loan insurance is justified to offer the best lending terms, it can simply make the insured loan and submit the Notice of Insured Loan Form to DCI afterward.
ILGP also offers interest subsidy payments for certain loans, which is a discretionary payment made to a lender for the benefit of a borrower whose projected or historical earnings are below the industry norm. A lender may request interest subsidy as part of a loan guarantee request.
To see the latest Indian Financing Act rate, visit TreasuryDirect's Monthly Interest Rate Certification page, click on the link for the current month and view table 6 for "Other Specific Legislation."
Lenders approved to work with ILGP can designate themselves a Department of the Interior Approved Lender. We've also recognized lenders with different designations in recognition of their commitment to ILGP. See past award recipients.For Borrowers
To qualify for a loan through the program, you must be:
- An individual who is an enrolled member of a federally recognized AI/AN tribe or group
- A federally recognized AI/AN group
- A corporation, limited liability company, or other business entity with no less than 51% ownership by federally recognized AI/AN individuals
Borrowers must have at least 20% equity in the project being financed and the project must benefit the economy of a reservation or tribal service area.
Borrowers may apply for a loan through any lender that regularly engages in making loans, and they’re not required to complete any government forms to participate in the program.
Additional Reporting for Interest Subsidy and Defaults
Lenders whose interest subsidy request has been approved must submit an Interest Subsidy Report to DCI on a quarterly basis.Interest Subsidy Reporting Forms
- Submit Notice of Default and Claim for Loss forms to DCI to evaluate the claim for loss and send appropriate payment to the lender on its claim.
- Upon payment of the claim for loss, the lender will then complete the Assignment of Loan Form to assign the loan to DCI who will either work on a settlement with the borrower, or the case will be referred to the Department of Justice and/or the Department of Treasury.