MVVF Presentation with Enterprise Bank - 3/16/11Presentation Transcript
3/16/2011 MVVF Presentation with Enterprise Bank
MassDevelopment: What we do
Promote capital investment in Massachusetts by providing integrated financial and development solutions
Business model – partner with banks, businesses, the state and municipalities to deliver programs
Primary economic development tools and programs
Loans and guarantees
Real estate planning and development services
MassDevelopment: Where we are
Tax-Exempt Bond Financing
Interest is exempt from federal income tax
Interest rates 1 – 2% lower than conventional loans
Borrower and project must both “qualify” under IRS Code
Deal must be $1.2MM to $10MM in size
Bonds can be sold in capital markets or purchased directly by a bank
Tax-Exempt Bond Financing
Building acquisition and expansion
Projects in Recovery Zones
Assisted living/long-term care developments
Manufacturers (small issues)
Affordable rental housing developers
Hospitals and health care institutions (effective 10/1/2010)
Real Estate Loans
Multi-tenant, mixed use, commercial/industrial
Manufacturers, small businesses, non-profits
Construction loans, usually as a participant with another lender
Maximum loan $5Million (recently raised from $2Million!!)
Up to 90% loan-to-value (LTV) on owner occupied real estate
Real Estate : To $5,000,000
Equipment: To $1,000,000
Mortgage Insurance: up to $1,000,000 on either a tax-exempt bond or on a bank direct loan to a customer
New: Manufacturing Innovation Initiative
Up to $50,000 with low interest rates and terms up to 5 years
Consultant services to evaluate and improve demand, fulfillment, market opportunities and other strategic opportunities
Innovation Initiative Loans
Up to $500,000 with low rates and terms up to 7 years
Reconfiguration of operations, upgrades to plant and equipment, product development, new staff and other uses.
New: Gateway Cities Loan Program
Loans to finance real estate and equipment projects for businesses and non-profit organizations in Gateway Cities
Reduced interest rates
24 small cities throughout Massachusetts are eligible
Real Estate Development
MassDevelopment undertakes a wide range of real
estate redevelopment projects that would not be
undertaken by the private sector alone
Redevelopment of surplus publicly-owned properties
Military base reuse - Devens
Real estate advisor to municipalities
and non-profit organizations
43D for site development
Specialty Loan Programs
Brownfields Redevelopment Fund
Emerging Technology Fund
100% Financing for Exporters
Charter School Loan Guarantees
USDA loan guarantees
SBA 504 loans (as the bank, not as the CDC!)
The Emerging Technology Fund (“The Fund”) was established in December of 2004 through an Enabling Act (Chapter 23G of the Massachusetts General Laws). The Fund was originally capitalized in the amount of $25 million and subsequently recapitalized (2006 and 2007) in the amounts of $15 million and $10 million respectively.
MassDevelopment, the Commonwealth’s economic development and financing Agency, administers the fund on behalf of the Commonwealth. An Advisory Committee selected by the Governor and the MassDevelopment Board of Directors, provides industry expertise and guidance.
The Fund was established to encourage emerging technology companies to open their post R&D product production operations in the Commonwealth. It does this by making qualified investments in the form of secured loans to borrowers. MassDevelopment is responsible for originating, underwriting and monitoring loans provided by the Fund .
Proceeds of the loan can be utilized to finance the expansion and build-out of leased facilities and for the acquisition of equipment defined as “Project Cost.” The program has been designed to leverage private financing for highly productive state-of-the-art facilities to foster the growth of high tech industry clusters and the skilled jobs they will bring in the 21 st century.
Must be considered an “emerging technology industry”;
Shall involve a transaction with the participation of at least two at-risk private parties;
Loan amount not to exceed $2.5 million;
Loans approved by MassDevelopment Board of Directors.
Seven year loan terms with interest-only payment options during the first year, converting to full amortization over the remaining loan term;
Fixed-rate pricing at 1.50% over the WSJ prime rate with a current floor rate of 6.50%;
One percent commitment fee;
First security interest in assets to be acquired (equipment financing). Leasehold improvements to require ABA security interest and collateral assignment of lease;
Warrants (To be determined).
The following is a representative sample of companies financed through the Emerging Technology Fund:
Beacon Power Corp.
Konarka Technologies, Inc.
Celldex Therapeutics (formerly Avant Immunotherapeutics)
Lilliputian Systems, Inc.
Luminus Devices, Inc.
Green Loan Program
To bridge the gap between costs of energy efficient projects and rebates of subsidies provided by utilities and federally sponsored programs;
$50,000 to $500,000, net of project related rebates or subsidies;
Energy efficiency program must be authorized by Mass DPU or another State or Federal program.
Green Loan Program uses:
HVAC replacements or improvements;
Windows, insulation, other building improvements;
Chillers and boilers;
Energy control systems;
Photovoltaic panels that meet the requirements of a State or Federally sponsored program