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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
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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.
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www.businesslendingsolutions.org
Resources (links, forms, etc.)Program descriptionsContact information
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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%
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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.
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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.
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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.
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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.
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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
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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
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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
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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
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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.
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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
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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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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%
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
“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%
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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SBA ONLINE CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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 CLASSROOM: GROWING A BUSINESSU.S. Small Business Administration
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
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