A Division of Region IV Development

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A Division of Region IV Development

What is Region IV Development?Community and economic development since

1975NetworkingLand use planningWorkforce developmentInfrastructure planning and financing

Business lending since 1984SBA since 1984Revolving Loan Fund (RLF) since 1986Intermediary Relending Program (IRP) since 2005

Commercial Lender Presentation 2

Business LendingRegion IV Development is a Certified Development

Company (CDC) that is licensed by the SBA to administer the SBA 504 program in Idaho.

CDC’s process, approve, close and service the loans on behalf of the Small Business Administration. The CDC is the direct lender for the SBA 504 loan program.

Region IV also administers and packages loans utilizing other lending programs which will be discussed later this morning.

These financing tools give us the opportunity to assist businesses find financing solutions.


www.businesslendingsolutions.org

Resources (links, forms, etc.)Program descriptionsContact information


US Small Business Administration 504 Loan Program

We process, approve, close and service 504 loans on behalf of the US Small Business Administration.

The SBA 504 loan program provides subordinated, long-term, low fixed-rate financing for qualified applicants and projects .

Eligible projects are for the fixed assets only.Maximum SBA funding to a borrower is $2,000,000 (rural)Currently, most fees have been abated.

Current Effective Rates: 20 years - 5.28% 10 years - 4.92%



The Revolving Loan Fund (RLF)Business Lending Solutions administers this loan program which can be utilized for:

• Real estate acquisition and improvement • Working capital• Equipment• Inventory •Maximum loan amount is $150,000•Maximum amortization: 5 years for equipment and working capital; 15 years for real estate.

Funds from the RLF can be used in projects located in the following Idaho counties: Camas, Cassia, Gooding, Jerome, Lincoln, Minidoka, Twin Falls, and the southern portion of Blaine County. (south of Muldoon Canyon Road – Bellevue.)

We currently have $131,840 available to lend.


USDA Intermediary Re-lending Program (IRP)Business Lending Solutions administers this program which provides limited funds for loans to small businesses in rural locations to create and retain employment. Eligible uses include:

•Real estate acquisition and improvement•Equipment•Working capital•Maximum loan amount is $150,000•Maximum amortization: 5 years for equipment and working capital; 15 years for real estate.

Funds from the IRP can be used in projects located in the following Idaho counties: Blaine, Camas, Cassia, Gooding, Jerome, Lincoln, Minidoka and Twin Falls (excluding the City of Twin Falls).

We currently have $218,230 available to lend.

Packaging for USDA Business and Industry Loan Program (B & I)

Business Lending Solutions packages loans under the U.S. Department of Agriculture Business and Industry Loan Program. This program offers guarantees to lenders who make loans to businesses in rural communities. Eligible uses of loan proceeds include:

Real estate acquisition and improvementEquipmentWorking capital

Under certain conditions, refinancing of existing debt is allowed.


Packaging for Idaho-Nevada Community Development Financial Institution (CDFI)

Business Lending Solutions prepares (and services) loan packages for the CDFI which provides community development financing for affordable housing projects and small business ventures. The Idaho-Nevada CDFI is a U.S. Department of Treasury designated Community Development Financial Institution and a Community Development Entity. The Idaho-Nevada CDFI focuses its lending and services primarily in those areas of Idaho and Nevada designated by the U.S. Department of Treasury as CDFI eligible.


Packaging for US Small Business Administration 7(a) Loan Programs

We package SBA 7(a) loans which can be used to finance needs for real estate, equipment, working capital, inventory, eligible franchises, business acquisition, ownership buyout, etc.


The ProcessWe are available to discuss the transaction at

the beginning of the processWe can assist with topics including structure,

eligibility and any other questions you may have prior to and during underwriting

We are available to meet with you to discuss all loan options

We will assist in the completion of required paperwork and assemble the entire package for bank underwriting

Once the loan is approved by the CDC and/or bank, we will submit the loan to the appropriate agencies for review and approval



Our dilemma is that we hate change and love it at the same time; what we really want is for things to remain the same but get better. – Sidney J . Harris

Even if you’re on the right track, you’ll get run over if you just sit there. – Will Rogers


Small Business Development Center Serving the 8 Counties of South

Central Idaho

CSI’s Idaho Small Business Development Center& Ec. Ed Director, Incubator Manager, Bryan J. Matsuoka

Senior Consultant, Jerry MotternCourse Developer & eBay Trainer, Sherry Rust

Edie Unland, Office Specialist & Mentoring Coordinator


SBDC Services Bryan Matsuoka, SBDC Director

Jerry Mottern, Consultant

• FREE Business Consulting– Research, Feasibility, Business Planning, &

More

• Business Trainings

• Small Business Mentoring

• CSI Business Incubator

• Commercial Kitchen


History of the SBDC

Since the Idaho SBDC's establishment in 1986, it has been the mission of our staff to deliver up-to-date consulting, training, technical assistance and environmental regulatory assistance in all aspects of small business management, with a primary goal of helping small business owners and potential business owners make sound decisions for the successful operation of their business.

With six office locations throughout the state, each affiliated with one of Idaho's colleges or universities, the Idaho SBDC is uniquely positioned to serve as a focal point for linking together our partners from higher education, the private business community, and federal, state and local government.


Events & Trainings• Renewable Energy Conference

• NxLevel Business Planning Courses– Online & Face-to-Face

• Staying Up in a Down Economy

• EMyth Follow-up Events

• ADA Disability Awareness Training

• Visit our website for a list of all of our current trainings

• www.csi.edu/isbdc

Lender Training & RoundtableLender Training & RoundtableAmerican Recovery & American Recovery & Reinvestment Act of 2009Reinvestment Act of 2009Ketchum– May 15, 2009Ketchum– May 15, 2009


SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration

American Recovery & Investment Act

Temporarily affects all SBA 7(a) & 504-CDC Loans approved on or after Feb 17, 2009 & should be available through Dec 2009

Eliminated the upfront SBA Guaranty Fee on all 7(a) Loans

Increased SBA’s Guaranty to 90% on all 7(a) Loans except SBAExpressLoans

Eliminated the Third-Party Participation Fee on 504-CDC Loans, CDC processing Fee & required deposits



SBA Loan Programs

7(a) CLP, & PLP Guaranty Loans - Up to $2,000,000

Idaho Prime – up to $750,000 Patriot Express – up to $500,000 SBAExpress– up to $350,000 504-CDC Loans (generally) up to $1,500,000 Maximum SBA Guaranty is $1,500,000

SBA Forms, Program Guides & SOP 50-10(5)Acan be found at www.sba.gov/banking



7(a) SBA Borrower is

Independent business including affiliates & related companies

Organized for profit

Located in the U.S. A. & owned by U.S. Citizens or Legal Permanent Residents

SBA Size Standards is generally revenues less than $6,500,000 & less than 100 employees



SBA Guaranty & Guaranty Fees

SBA Guaranty is 90% on all 7(a) loans, except for SBAExpress

The SBA Guaranty Fee was eliminated on all SBA 7(a) loans

The increased SBA Guaranty & elimination of the SBA Guaranty Fees became effective Feb 17, 2009 & should be available through approximately December 2009

SBAExpressGuaranty remains at 50%.

The On-going Annual Fee paid by lender is 0.55%



7(a) PLP & Patriot Express Interest Rates

Can be fixed or variable7 years or less is Prime +2.25%7 or more is Prime +2.75%Additional 1% on Loans $25,001 -$50,000 Additional 2% On Loans $25,000 Or Less

Or based on the one month LIBOR +3.00%

Interest Rates can be less



“Idaho Prime” Loan Program

Is a 7(a), PLP or Patriot Express SBA LoanInterest rate to borrower is Prime +0%Interest rate is adjusted each Calendar QuarterLoans up to $750,000Business located in IdahoState Treasurer purchases the Guaranteed portion

at Prime -2.00%Estimated yield to lender is about Prime +11.93%



SBAExpress

Loans up to $350,00050% GuarantyRevolving Loans up to 7 Years - otherwise

payment term is the same as 7(a) loansAllowable interest rates

Over $50,001 Prime +4.5%Under $50,000 Prime +6.5%

Interest Rates can be less



SBAExpress(CONT)

Unsecured up to $25,000Lender Collateral Policy applies up to

$150,000Loans over $150,000 must be secured Lender uses own forms & loan productsLender approves the loanCan be funded via E-Tran



Patriot Express

Loans up to $500,000Eligible for Veterans; service-disabled

veterans, active-duty service members eligible for the military’s Transition Assistance Program; reservists & national guard members; current spouses of any of the above; widowed spouse of a service member or veteran who died during service or of a service-connected disability

SBA Guaranty 90% - the same as 7(a) & PLP



Patriot Express (CONT)

Revolving Loans up to 7 Years - otherwise payment term is the same as 7(a) loans

Allowable interest rates – same as 7(a)Interest rates can be lessUnsecured up to $25,000Lender Collateral Policy applies up to $350,000Loans over $350,000 must be secured Lender uses own forms & loan productsLender approves the loanCan be funded via E-Tran



Loan proceeds

Start-up, expansion, inventory, accounts receivable, working capital, machinery, equipment, MV’s, leasehold improvements, refinance debt, change of ownership, loan fees

7 to 10 year term Purchase of Real Estate – initial occupancy

for new is 60% & 51% for Existing

25 year term



Refinance Debt

Debt service reduction by at least 20% Short term loans are not subject to 20% Rule Lender is not in a position to sustain a loss Lender “certifies” it’s debt has not been more

than 29 days past due in the last 36 months & provides a transcript of the disbursement –payment history

Existing SBA debt – restructure rather than refinance



Change of ownership

Must preserve and/or enhance the business Verify the sellers last 3 years income tax returns with

IRS before loan can be disbursed For loans $250,000 or less, the Lender may do its

own valuation For loans greater than $250,000 or if there is a close

relationship between the buyer & seller, the lender must obtain an Independent business valuation from a qualified source. Valuations provided by the seller or buyer are do not meet these requirements

Can finance 50% of “Good Will” up to $250,000



Some Deals SBA can not do

Non-profit Mini-warehouses; apartments, investment

or rental property - landlords Business or applicant that the Government

has experienced a loss Pyramid plans Speculation, profits from price fluctuation Restricts membership – private clubs On parole or probation



504-CDC Loan ProgramThe Third Party Participation Fee was eliminated

effective Feb 17, 2009 & will be available through about Dec 2009

Finances fixed assets, generally real estate Is a “Loan to Value” programGenerally, the maximum SBA Debenture is

$1,500,000 ($2,000,000 for Public Policy Goals)Net worth less than $8,500,000, net profit less

than $3,000,000, create 1 job for each $65,000 in 504-CDC funds



Idaho Exporting

Inga Fisher WilliamsSBA Regional Export Finance Manager

One World Trade Center 121 SW Salmon Street – Suite 242

Portland, Oregon 97204503-326-5498 Fax 503-326-6351

[email protected]/localresources/district/id/ID_ITRESOURCES.html

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SBA Online Training via www.sba.gov SBA Banking site www.sba.gov/banking Service Corps of Retired Executives – SCORE

www.idahotvscore.org Small Business Development Centers – SBDC

www.idahosbdc.org Reviewed Franchiseswww.franchiseregistry.com E-Mail [email protected] for franchise

eligibility not covered in the franchise registry

Other Resources

Questions and

Open Discussion


A Division of Region IV Development

Documents

Transcript of A Division of Region IV Development