How Can Revolving Loan Funds Make Our Coasts More Resilient?

This fact sheet explains the structure and application of revolving loan funds (RLFs) as a financing mechanism for environmental and climate resilience projects. It details the operational history of Maryland's Shore Erosion Control RLF and a feasibility study for a proposed RLF in the Puget Sound region of Washington state to support shoreline restoration and hazard mitigation.

• Revolving loan funds (RLFs) are self-replenishing financing mechanisms that use a base of capital—often from grants or private investment—to issue loans; as borrowers repay the principal and interest, the funds are reused for new projects. This structure allows RLFs to support more participants than grant programs with the same initial funding and helps property owners overcome the barrier of high upfront costs for environmental improvements.
• The U.S. government has prioritized RLFs for hazard mitigation and climate resilience. The STORM Act (P.L. 116-284), passed on January 1, 2021, enables FEMA to provide funds to tribal governments and states to establish RLFs for reducing risks from natural hazards and disasters. Additionally, the House Select Committee on the Climate Crisis recommended a Natural Infrastructure Resilient Communities Revolving Loan Fund for municipalities to use natural solutions against sea level rise and storms.
• Maryland's Shore Erosion Control (SEC) Revolving Loan Fund, established in 1970, provides zero-interest loans to municipalities, businesses, and households for nature-based "living shoreline" projects. The program shifted away from "hard armor" like bulkheads after research showed natural solutions were more cost-effective and efficient. The fund is self-sustaining, relying on annual repayments of $600,000 to $700,000, with approximately 85 percent of those funds reinvested into the RLF.
• In the Puget Sound region of Washington, a feasibility study is being conducted to establish an RLF to encourage the removal of hard armor (which exists on 29 percent of shorelines) and the adoption of "soft shore protection." The proposed RLF would target four project types: structure elevation, structure relocation, soft shore protection, and armor removal. Costs for these projects vary significantly, from $10,000–$20,000 for armor removal to over $200,000 for moving a house.
• Other examples of environmental RLFs in the U.S. include the EPA's Clean Water State Revolving Fund (CWSRF) and Drinking Water State Revolving Fund (DWSRF), both of which have 51 funds across the country. In the energy sector, Texas's LoanSTAR program provided $250 million for public building energy efficiency, and Nebraska's Dollar and Energy Savings Program has funded nearly 30,000 projects since 1990.

APA

Crook, M. (2021). How Can Revolving Loan Funds Make Our Coasts More Resilient? Environmental and Energy Study Institute. https://www.eesi.org/papers/view/fact-sheet-how-can-revolving-loan-funds-make-our-coasts-more-resilient

Chicago

Crook, Maia. How Can Revolving Loan Funds Make Our Coasts More Resilient? Environmental and Energy Study Institute, 2021. https://www.eesi.org/papers/view/fact-sheet-how-can-revolving-loan-funds-make-our-coasts-more-resilient.

Wikipedia

{{cite report |last1=Crook |first1=Maia |title=How Can Revolving Loan Funds Make Our Coasts More Resilient? |publisher=Environmental and Energy Study Institute |date=21 January 2021 |url=https://www.eesi.org/papers/view/fact-sheet-how-can-revolving-loan-funds-make-our-coasts-more-resilient |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{crook2021how, author = {Crook, Maia}, title = {{How Can Revolving Loan Funds Make Our Coasts More Resilient?}}, institution = {Environmental and Energy Study Institute}, year = {2021}, month = jan, url = {https://www.eesi.org/papers/view/fact-sheet-how-can-revolving-loan-funds-make-our-coasts-more-resilient}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }