NADO ATC
Small Business Lending
SC Case Study
NADO ATC
 Catawba Regional COG/Catawba Regional
Development Corporation
◦ $53 million of loans originated
◦ $123 million ...
NADO ATC
 Products and Coverage
 SBA 504 – statewide lender
 EDA RLF – 18 Counties – expanded in 2012/2013
◦ Assumption...
NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ POLICY MAKERS:
 Strategy and buy-in with COG Boards (old and new ...
NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ LOAN ADMINISTRATION/FINANCE
 New fund manager does initial file, ...
NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ LOAN ADMINISTRATION/FINANCE
 Credit/Underwriting
◦ Current and Pa...
NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ EXISTING CUSTOMERS AND PROSPECTS:
 Communications with customers
...
NADO ATC
 Summary
◦ Economies of scale exist
◦ Request time to deploy new capital
 Developing new territories and relati...
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Imler.tuesday

  1. 1. NADO ATC Small Business Lending SC Case Study
  2. 2. NADO ATC  Catawba Regional COG/Catawba Regional Development Corporation ◦ $53 million of loans originated ◦ $123 million of private capital leveraged ◦ 2,100+ SC jobs created or preserved ◦ $25MM of loan assets under management
  3. 3. NADO ATC  Products and Coverage  SBA 504 – statewide lender  EDA RLF – 18 Counties – expanded in 2012/2013 ◦ Assumption of Economic Development Administration (EDA) Revolving Loan Funds (RLF) from: Lowcountry, Lower Savannah, and Santee-Lynches COG regions  USDA IRP – 9 counties ◦ 5 new counties with Santee Lynches IRP debt assumption  Brownfields RLF Fund Manager ◦ Statewide lender, capitalized by US Environmental Protection Agency (EPA)
  4. 4. NADO ATC  EDA RLF Consolidation – SC Lessons Learned ◦ POLICY MAKERS:  Strategy and buy-in with COG Boards (old and new fund managers)  New fund manager commits to market in old territory, although loans can be made based upon market demand  Resolutions of support from both COG Boards  Preparation and approval of amended RLF Plan  EDA provides grant assumption documentation for both organizations
  5. 5. NADO ATC  EDA RLF Consolidation – SC Lessons Learned ◦ LOAN ADMINISTRATION/FINANCE  New fund manager does initial file, legal, and documentation reviews ◦ Preferably with existing fund manager staff ◦ Include finance staff - balance sheet impact for both organizations  Legal Review ◦ All existing loans:  Documents – including note, loan agreement, security agreement, mortgages/deeds of trust, UCC filings  Validity, priority and outstanding amount of existing liens and/or mortgages  Loan and security documents to determine if loans are assumable
  6. 6. NADO ATC  EDA RLF Consolidation – SC Lessons Learned ◦ LOAN ADMINISTRATION/FINANCE  Credit/Underwriting ◦ Current and Past Financial Information:  Review borrowers’ financial statements (if available) for cash flow coverage  Determine collateral adequacy (appraisals in file, current tax value, other)  Payment performance, and guarantor support ◦ Personal Financial Statements, guarantor tax returns (if available)  Communicate with third party entities (i.e. insurers) to ensure coverage remains in place for hazard, life, etc.  Based upon Legal and Credit/Underwriting reviews: ◦ Loan write-downs are done by mutual agreement at portfolio assumption (by either old or new fund manager/lender)
  7. 7. NADO ATC  EDA RLF Consolidation – SC Lessons Learned ◦ EXISTING CUSTOMERS AND PROSPECTS:  Communications with customers ◦ Written and verbal from existing fund manager and new fund manager ◦ Personal introductions (when feasible) to customers by new fund manager/servicing staff ◦ New servicing staff aggressively, but nicely, introduces reporting requirements and payment processes ◦ If mistakes occur, remedy quickly and firmly  Marketing in new areas: ◦ Leverage existing banking and board relationships ◦ Economic development partners ◦ Referrals (establish point person) from old fund manager to pass quickly to new fund manager
  8. 8. NADO ATC  Summary ◦ Economies of scale exist ◦ Request time to deploy new capital  Developing new territories and relationships requires patience and time ◦ Things will happen which you don’t expect (good and bad) ◦ Common Solution: Better to have a larger capital pool to serve the state than for funds to be sequestered ◦ Questions?
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