Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

OECDD Cornerstones Stimulus Funds Presentation


Published on

Gabe Silva from OECDD provides background information on loan programs available to businesses in Oregon.

Published in: Business, Economy & Finance
  • Be the first to comment

  • Be the first to like this

OECDD Cornerstones Stimulus Funds Presentation

  1. 1. Oregon Economic and Community Development Department <ul><li>Our mission is to advance Oregon's economy .   We look forward to paving the way for continued sustainable economic development in Oregon, and working with the Governor, private industry and other state agency partners to ensure opportunity for Oregonians today and beyond. </li></ul><ul><li>Gabe Silva, Small Business Services Officer </li></ul><ul><li>503-986-0161 [email_address] </li></ul><ul><li> </li></ul>
  2. 2. Oregon Business Development Fund <ul><li>Statewide revolving loan fund providing long-term, fixed-rate financing for: </li></ul><ul><ul><li>Land </li></ul></ul><ul><ul><li>Buildings </li></ul></ul><ul><ul><li>Equipment </li></ul></ul><ul><ul><li>Term working capital </li></ul></ul>
  3. 3. Oregon Business Development Fund <ul><li>Job creation/retention </li></ul><ul><li>Gap financing </li></ul><ul><li>Manufacturing, other traded-sector businesses </li></ul><ul><li>Up to 40% total project cost, max. $700,000 </li></ul><ul><ul><li>Private lender required, usually 10% min. equity </li></ul></ul><ul><li>Good and sufficient collateral </li></ul>
  4. 4. Credit Enhancement Fund <ul><li>Guarantee bank loans – Increase availability of capital to assist Oregon businesses in creating/retaining jobs </li></ul><ul><li>Traded sector business focus - national, international markets </li></ul><ul><li>Distressed areas – all businesses eligible; administratively quick and easy </li></ul><ul><li>Bank sets rates and terms </li></ul>
  5. 5. Credit Enhancement Fund <ul><li>Working capital lines of credit </li></ul><ul><li>Evergreen Entrants </li></ul><ul><ul><li>Initial working capital line </li></ul></ul><ul><ul><li>Maximum $500,000 or 75% </li></ul></ul><ul><ul><li>Fee: 1.25% of insured amount annually </li></ul></ul><ul><li>Evergreen Plus </li></ul><ul><ul><li>Expand working capital line </li></ul></ul><ul><ul><li>Maximum $500,000 or 90% of new increment </li></ul></ul><ul><ul><li>Fee: 2.5% of insured amount annually </li></ul></ul>
  6. 6. Credit Enhancement Fund <ul><li>Term loans </li></ul><ul><li>Conventional Insurance </li></ul><ul><ul><li>Up to 90% guarantee </li></ul></ul><ul><ul><li>Maximum $700,000 </li></ul></ul><ul><ul><li>Fee: 1.25% to 3% of insured amount depending on term </li></ul></ul><ul><ul><li>Secured predominately by fixed assets </li></ul></ul><ul><li>First Loss Insurance </li></ul><ul><ul><li>100% insurance on first 25% of loan amount </li></ul></ul><ul><ul><li>Maximum $300,000 </li></ul></ul><ul><ul><li>Fee: 2.5% to 6% of insured amount depending on term </li></ul></ul><ul><ul><li>Secured predominately by fixed assets </li></ul></ul>
  7. 7. Industrial Development Bond <ul><li>- Provides low-cost financing for projects </li></ul><ul><li>Issue tax exempt bonds for manufacturing ( includes - software , biotech processes) and solid waste facilities (and some non-profits). </li></ul><ul><li>Key Federal IRS requirements for projects: </li></ul><ul><ul><li>$ 10 million maximum bond amount </li></ul></ul><ul><ul><li>$20 million capital expenditures limit </li></ul></ul><ul><ul><li>Fixed assets only, generally new fixed assets </li></ul></ul>
  8. 8. Capital Access Program <ul><li>Provides loan portfolio loss reserve to increase availability of bank loans to small businesses </li></ul><ul><li>Transaction between borrower/lender; bank assesses risk, sets loan terms </li></ul><ul><li>Borrower pays fee 3%-7% of loan; goes into loss reserve fund held at bank </li></ul>
  9. 9. Capital Access Program <ul><li>OECDD matches fee; distressed areas and new banks receive double match </li></ul><ul><li>Reserve grows as lenders participate; drawn on to cover default losses </li></ul><ul><li>Quick turnaround 3–5 days </li></ul><ul><li>Term loan or line of credit </li></ul><ul><li>Virtually any type of business qualifies </li></ul><ul><ul><li>Exceptions: construction or purchase of residential housing property not used for business operations , existing loan refinancing </li></ul></ul>
  10. 10. Entrepreneurial Development Loan Fund <ul><li>Micro-lending fund to support start-ups </li></ul><ul><li>Borrower applies through Small Business Development Center or certified entity </li></ul><ul><li>Benefit to banking community - A funding source you can refer customers to that are not yet bankable </li></ul><ul><li>Up to $25,000 initial loan; follow-on loans available </li></ul><ul><li>Rate: Fixed, prime plus 2.0% </li></ul><ul><li>5 year maximum, equity of 20% of loan amount needed. </li></ul>
  11. 11. Business Finance Staff <ul><li>Gary Ross, Business Finance Officer 503–986–0167 </li></ul><ul><li>David Weiss, Business Finance Officer 503–986–0170 </li></ul><ul><li>Les Livengood, Business Finance Officer 503–986–0169 </li></ul><ul><li>Terry Hegle, Business Finance Officer 503–986–0168 </li></ul><ul><li>Laura Engstrom, Business Finance Officer 503–986–0174 </li></ul><ul><li>Pamela Brunell, Administrative Assistant 503–986–0172 </li></ul>
  12. 12. Business Retention Services fund <ul><li>Program providing consulting services to assist Oregon companies facing difficult changes. </li></ul><ul><li>Consultant is matched to a company based on specific needs and industry requirements </li></ul><ul><li>Interest-free loan </li></ul><ul><li>Specific eligibility criteria: emerging industries/clusters with high potential for job creation/retention, traded sector, emergent technologies and distressed areas. </li></ul>
  13. 13. Government Contract Assistance Program <ul><li>GCAP Bid Match – Daily computer matching of contract opportunities with your company including: </li></ul><ul><li> opportunities starting at $25,000 from federal agencies </li></ul><ul><li>Simplified acquisitions opportunities under $100,000 from several major buying agencies for products only </li></ul><ul><li>International bid opportunities </li></ul><ul><li>State and local leads </li></ul>
  14. 14. Government Contract Assistance Program <ul><li>Workshops, seminars and individual business training in: </li></ul><ul><li>Selling to the Government </li></ul><ul><li>Bid preparation </li></ul><ul><li>GSA MAS (Multiple Award Schedule) </li></ul><ul><li>RFID (Radio Frequency Identification) </li></ul><ul><li>Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) </li></ul>
  15. 15. Government Contract Assistance Program <ul><li>Support Services: </li></ul><ul><li>Access to Federal Acquisition Regulations and Policy </li></ul><ul><li>Government database registrations </li></ul><ul><li>Government certifications assistance </li></ul><ul><li>Bid packets and proposals </li></ul><ul><li>Protest procedures and information </li></ul><ul><li>Contract administration </li></ul>
  16. 16. Government Contract Assistance Program <ul><li>Local GCAP Offices: </li></ul><ul><li>Springfield: 541-736-1088 or 800-497-7551 </li></ul><ul><li>North Bend: 541-756-5596 </li></ul><ul><li>Portland: 503-635-3921 or 800-803-7175 </li></ul>
  17. 17. Service Providers <ul><li>Small Business Development Centers - Statewide www.BIZCENTER.ORG </li></ul><ul><li>Targeted Service Providers : OAME, ONABEN, OMEN, HMC, East County One-stop, Interface Network, Edev, Partnership to End Poverty, GCAP, Philippine American Chamber of Commerce, Shorebank Enterprise Cascadia. </li></ul><ul><li> </li></ul>
  18. 18. Recovery and Stimulus Program Information <ul><li>Economic Stimulus and Recovery: &quot;The Oregon Way“ </li></ul><ul><li>To register and search a list of available opportunities with the state of Oregon, please visit the Oregon Procurement Information Network (ORPIN) </li></ul><ul><li>Small Business Administration Program Plan </li></ul><ul><li>Federal Government, Building the Recovery </li></ul>
  19. 19. <ul><li>Find Grant Opportunities </li></ul><ul><li>Get Registered </li></ul><ul><li>Apply for Grants </li></ul><ul><li>Track My Application </li></ul><ul><li>Applicant Resources </li></ul><ul><li>Search FAQs, User Guides and Site Information </li></ul>
  20. 20. VETS Puts America’s Heroes to Work Hurricane Preparedness: Are You Ready? For All U.S. Residents. FREE. Finding the right loan for you is easy at! <ul><li>All Loans </li></ul><ul><li>Agriculture </li></ul><ul><li>Business </li></ul><ul><li>Disaster Relief </li></ul><ul><li>Education </li></ul><ul><li>Housing </li></ul><ul><li>Veteran </li></ul>
  21. 21. Gateway to government loan information Agencies whose loan programs are represented on this site: <ul><li>U.S. Department of Agriculture </li></ul><ul><li>U.S. Department of Commerce </li></ul><ul><li>U.S. Department of Education </li></ul><ul><li>U.S. Department of Housing & Urban Development </li></ul><ul><li>U.S. Department of Veterans Affairs </li></ul><ul><li>U.S. Small Business Administration </li></ul>
  22. 22. SBA - ARC Stabilization Loan Program Recovery Plan <ul><li>The America’s Recovery Capital (ARC) loan program will: </li></ul><ul><li>offer up to $35,000 to help viable small businesses that need help in paying their existing loans to get through a short-term downturn. </li></ul><ul><li>free up capital for these small businesses, with the SBA fully subsidizing the interest payment. </li></ul><ul><li>100% Guarantee to lender </li></ul>
  23. 23. SBA Administrator Karen Mills Business Journal New, May 16, 2009 <ul><li>“ ARC loans are for viable businesses that need some help today to pay interest and principal on an existing non-SBA loan.” </li></ul><ul><li>“ After the six months of payment, this ARC loan does not have to be paid off at all for the next year, and then there’s usually five years after that to repay them.” </li></ul><ul><li>Question: What sort of response are you getting from lenders? “These are loans that help their loans, these are for non-SBA loans. It’s very good for them.” </li></ul>
  24. 24. SBA 7(a) Loan <ul><li>For Small Businesses - Typically for new businesses, lack of earnings history, insufficient collateral, longer terms. </li></ul><ul><li>Applicant goes directly to bank, bank applies to SBA, bank closes and services loan, SBA pays guaranty if default. </li></ul><ul><li>Lender makes loan under SBA guidelines: </li></ul><ul><li>Loans up to 150,000 – 85% </li></ul><ul><li>Loans over 150,000 – 75% </li></ul>
  25. 25. SBA 7(a) Loan <ul><li>SBA guidelines (continued): </li></ul><ul><li>Max. guaranty is 1.5 million </li></ul><ul><li>Max. loan size is 2 million </li></ul><ul><li>Rate is negotiated between borrowers and lender subject to SBA maximums (generally 2 ¼ over prime for loans less than 7 years and 2 ¾ over 7 years) </li></ul>
  26. 26. SBA 504 Loan Program <ul><li>Suited for larger capital expansion projects, 50/40/10 structure is typical; designed to facilitate job creation. </li></ul><ul><li>1.5 MM for regular loans, 2.0 MM for public policy loans, 4.0 MM for small manufacturer loans. </li></ul><ul><li>Recovery Act changes include elimination of guarantee fees and increase of guarantee percent, waives processing and third party participation fees, etc. </li></ul>
  27. 27. SBA Portland District Contacts <ul><li>Dennis Lloyd, Lead Lender Relations Specialist: </li></ul><ul><li>503-326-5205. </li></ul><ul><li>Russ Hooker , Lender Relations Specialist: </li></ul><ul><li>503-326-5200. E-mail: [email_address] </li></ul>
  28. 28. USDA - Farm Service Agency (FSA) <ul><li>Provides loans, loan guarantees and business planning to eligible farmers, ranchers and others to support a thriving agricultural economy. </li></ul><ul><li>Up to 90% or 95% of Guarantee of: </li></ul><ul><li>Principle </li></ul><ul><li>Accrued Interest </li></ul><ul><li>FSA Authorized Protective Advances </li></ul><ul><li>Any Subsidy Payment Due (Interest Assistance) </li></ul>
  29. 29. Types of FSA Guarantees <ul><li>Annual Operating Loans (operating expenses, family living expenses, debt service payments) </li></ul><ul><li>Intermediate Term Operating Loans (capital purchases like machinery and equipment, debt restructuring and refinancing). </li></ul><ul><li>Farm Ownership Loans – Purchase or Improve Land or Restructure Debt </li></ul>
  30. 30. FSA Guaranteed Loan Limits, Interest Rates, Loan Terms <ul><li>Operating Loans or Lines of Credit: $1,094,000 </li></ul><ul><li>Farm Ownership Loans: $1,094,000 </li></ul><ul><li>Interest Rates must not exceed the rate charged to “average” agricultural loan customer. </li></ul><ul><li>Loan terms vary: 1 year (Annual Operating Loans), 3 to 5 years (Multi-year Lines of Credit), up to 7 years (Intermediate Term Loans) and up to 40 years (Real Estate Loans). </li></ul>
  31. 31. Farm Service Agency Contacts <ul><li>Lynn Voigt, Farm Loan Chief, 503-692-1973 x256 [email_address] </li></ul><ul><li>Bob Perry, Farm Loan Specialist, 503-692-1973 x257 [email_address] </li></ul><ul><li>Peter Halvorson, Farm Loan Specialist, 503-692-1973 x 255. [email_address] </li></ul><ul><li>FSA Website: </li></ul>
  32. 32. USDA Rural Development (RD) <ul><li>An umbrella of federal agencies within USDA serving the needs of rural America </li></ul><ul><li>Housing Programs – single & multi-family housing </li></ul><ul><li>Community Programs – community facilities & infrastructure </li></ul><ul><li>Business & Coop Programs – business development </li></ul>
  33. 33. A few of RD’s guaranteed loan programs <ul><li>Business & Industry ( B&I ) Guaranteed Loans </li></ul><ul><li>Rural Energy for America ( REAP ) Guaranteed Loans </li></ul><ul><li>Community Facilities ( CF ) Guaranteed Loans </li></ul>
  34. 34. Business & Industry (B&I) Guaranteed Loans <ul><li>The B&I program is lender-driven . USDA guarantees the loan rather than lending directly. </li></ul><ul><li>A commercial lender requests the B&I guarantee, and, if approved, it makes (and services) the loan . </li></ul><ul><li>Federal guarantee for lenders on their rural business loans: </li></ul><ul><li>80% guarantee on loans up to $5 million </li></ul><ul><li>70% guarantee on loans from $5-10 million </li></ul><ul><li>Size of loans: No minimum, but usually from $200,000 </li></ul><ul><li>up to $10 million . </li></ul>
  35. 35. B&I: Eligible Businesses <ul><li>Retail Manufacturing </li></ul><ul><li>Wholesale Service </li></ul><ul><li>Hotels & motels Nonprofits </li></ul><ul><li>Nurseries Vertically-integrated </li></ul><ul><li>Timber & forestry agri-businesses (e.g. wineries ) </li></ul><ul><li>and Commercial investment property </li></ul><ul><li>Retail centers, office buildings, industrial facilities, etc. - No owner-occupancy required . </li></ul>
  36. 36. B&I: Rates and Terms <ul><li>Negotiated between lender & business </li></ul><ul><li>Interest rate : Fixed or variable (quarterly or longer) </li></ul><ul><li>Structure : Fully amortized; no balloons </li></ul><ul><ul><li>Working capital – up to 7 years </li></ul></ul><ul><ul><li>Equipment – up to 15 years </li></ul></ul><ul><ul><li>Real estate – up to 30 years </li></ul></ul><ul><li>Prepayment penalty : – OK </li></ul>
  37. 37. Underwriting requirements <ul><li>The business and its owners must have a good credit history . </li></ul><ul><li>The business must have tangible balance sheet equity position at loan closing/project completion: </li></ul><ul><li> 10% or more (for existing businesses) </li></ul><ul><li>= Debt/ Tangible Worth ratio of ≤ 9.0 </li></ul><ul><li> 20% or more (for new businesses) </li></ul><ul><li>= Debt/ Tangible Worth ratio of ≤ 4.0 </li></ul><ul><li>There must be adequate collateral ( Real estate, Accounts receivable , Inventory ) and hazard and life insurance, etc. </li></ul>
  38. 38. Rural Energy for America (REAP) Guaranteed Program <ul><li>70-85% guarantees on loans up to $25 MM </li></ul><ul><li>Loans to: </li></ul><ul><ul><li>Rural small businesses (SBA definition) </li></ul></ul><ul><ul><li>Farmers & ranchers </li></ul></ul><ul><li>Loans for up to 75% of the cost of : </li></ul><ul><ul><li>Installing renewable energy systems </li></ul></ul><ul><ul><li>Installing energy eff. improvements </li></ul></ul><ul><li>$20,000 Grants for renewable energy generating systems . Deadline is 7-31-09. </li></ul>
  39. 39. Community Facilities (CF) Guaranteed Program <ul><li>90% guarantees on loans up to $25 million ! </li></ul><ul><li>(Communities of ≤ 20,000 population) </li></ul><ul><li>Loans to: </li></ul><ul><ul><li>Nonprofits </li></ul></ul><ul><ul><li>Public bodies & Tribes </li></ul></ul><ul><li>Loans for: </li></ul><ul><ul><li>Developing/improving community facilities </li></ul></ul><ul><ul><li>e.g. hospitals & health clinics, community centers, emergency vehicles, public schools, museums, etc. </li></ul></ul>
  40. 40. USDA Rural Development Oregon <ul><li>Portland (State Office)*  Pendleton * </li></ul><ul><li> Corvallis *  Redmond * </li></ul><ul><li> Roseburg * </li></ul><ul><li>Jeff Deiss, Business & Cooperative Program Director – 503-414-3367 </li></ul><ul><li>USDA Rural Development, Oregon </li></ul><ul><li> </li></ul>