OECDD Cornerstones Stimulus Funds Presentation

Oregon Economic and Community Development Department

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.

Gabe Silva, Small Business Services Officer503-986-0161 [email protected]://www.oregon4biz.com/smbiz.htm

Oregon Business Development Fund

www.oregon4biz.com/obdf.htm

Statewide revolving loan fund providing long-term, fixed-rate financing for:• Land• Buildings• Equipment• Term working capital

Oregon Business Development Fund

Job creation/retentionGap financingManufacturing, other traded-sector

businesses

Up to 40% total project cost, max. $700,000Private lender required, usually 10%

min. equity

Good and sufficient collateral

Credit Enhancement Fundwww.oregon4biz.com/cef.htm

Guarantee bank loans – Increase availability of capital to assist Oregon businesses in creating/retaining jobs

• Traded sector business focus - national, international markets

Distressed areas – all businesses eligible; administratively quick and easy

Bank sets rates and terms

Credit Enhancement Fund

Working capital lines of creditEvergreen Entrants

Initial working capital line Maximum $500,000 or 75% Fee: 1.25% of insured amount annually

Evergreen Plus Expand working capital line Maximum $500,000 or 90% of new increment Fee: 2.5% of insured amount annually

Credit Enhancement Fund

Term loansConventional Insurance

Up to 90% guarantee Maximum $700,000 Fee: 1.25% to 3% of insured amount depending on

term Secured predominately by fixed assets

First Loss Insurance

100% insurance on first 25% of loan amount Maximum $300,000 Fee: 2.5% to 6% of insured amount depending on term Secured predominately by fixed assets

Industrial Development Bond

www.oregon4biz.com/idrb.htm

- Provides low-cost financing for projectsIssue tax exempt bonds for

manufacturing (includes - software , biotech processes) and solid waste facilities (and some non-profits).

Key Federal IRS requirements for projects:

$10 million maximum bond amount

$20 million capital expenditures limit

Fixed assets only, generally new fixed assets

Capital Access Programwww.oregon4biz.com/cap.htm

Provides loan portfolio loss reserve to increase availability of bank loans to small businesses

Transaction between borrower/lender; bank assesses risk, sets loan terms

Borrower pays fee 3%-7% of loan; goes into loss reserve fund held at bank

Capital Access Program

OECDD matches fee; distressed areas and new banks receive double match

Reserve grows as lenders participate; drawn on to cover default losses

Quick turnaround 3–5 days

Term loan or line of credit

Virtually any type of business qualifies Exceptions: construction or purchase of residential

housing property not used for business operations , existing loan refinancing

Entrepreneurial Development Loan Fund

www.oregon4biz.com/edlf.htm

Micro-lending fund to support start-upsBorrower applies through Small Business

Development Center or certified entityBenefit to banking community - A funding

source you can refer customers to that are not yet bankable

Up to $25,000 initial loan; follow-on loans available

Rate: Fixed, prime plus 2.0%5 year maximum, equity of 20% of loan

amount needed.

Business Finance Staff

Gary Ross, Business Finance Officer 503–986–0167

David Weiss, Business Finance Officer 503–986–0170

Les Livengood, Business Finance Officer 503–986–0169

Terry Hegle, Business Finance Officer 503–986–0168

Laura Engstrom, Business Finance Officer 503–986–0174

Pamela Brunell, Administrative Assistant 503–986–0172

Business Retention Services fund

http://www.oregon4biz.com/brs.htm

Program providing consulting services to assist Oregon companies facing difficult changes.

Consultant is matched to a company based on specific needs and industry requirements

Interest-free loanSpecific eligibility criteria: emerging

industries/clusters with high potential for job creation/retention, traded sector, emergent technologies and distressed areas.

Government Contract Assistance Program

GCAP Bid Match – Daily computer matching of contract opportunities with your company including:

www.GedBizOpps.gov opportunities starting at $25,000 from federal agencies

Simplified acquisitions opportunities under $100,000 from several major buying agencies for products only

International bid opportunitiesState and local leads


Workshops, seminars and individual business training in:

Selling to the GovernmentBid preparationGSA MAS (Multiple Award Schedule)RFID (Radio Frequency Identification)Small Business Innovation Research (SBIR)

and Small Business Technology Transfer (STTR)


Support Services:Access to Federal Acquisition

Regulations and PolicyGovernment database registrationsGovernment certifications assistanceBid packets and proposalsProtest procedures and informationContract administration


Local GCAP Offices:Springfield: 541-736-1088 or 800-497-7551

North Bend: 541-756-5596Portland: 503-635-3921 or 800-803-7175

Service ProvidersSmall Business Development Centers -

Statewide www.BIZCENTER.ORG

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.

http://www.oregon4biz.com/smbiz.htm

Recovery and Stimulus Program Information

Economic Stimulus and Recovery: "The Oregon Way“ http://www.oregon.gov/recovery/

To register and search a list of available opportunities with the state of Oregon, please visit the Oregon Procurement Information Network (ORPIN) http://orpin.oregon.gov/open.dll/welcome

Small Business Administration Program Plan http://www.recovery.gov/?q=content/program-plan&program_id=5437

Federal Government, Building the Recovery http://www.recovery.gov/

www.Grants.gov

Find Grant OpportunitiesGet RegisteredApply for GrantsTrack My ApplicationApplicant ResourcesSearch FAQs, User Guides and Site Information

www.govloans.gov/govlaons_en.portal

VETS Puts America’s Heroes to Work

Hurricane Preparedness: Are You Ready?

•All Loans •Agriculture •Business •Disaster Relief •Education •Housing •Veteran

For All U.S. Residents. FREE.Finding the right loan for you is easy at GovLoans.gov!

Gateway to government loan informationAgencies whose loan programs are represented on

this site:

U.S. Department of AgricultureU.S. Department of CommerceU.S. Department of EducationU.S. Department of Housing & Urban

DevelopmentU.S. Department of Veterans AffairsU.S. Small Business Administration

SBA - ARC Stabilization Loan Program Recovery Plan

The America’s Recovery Capital (ARC) loan program will:

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.

free up capital for these small businesses, with the SBA fully subsidizing the interest payment.

100% Guarantee to lenderhttp://www.recovery.gov/?q=content/program-plan&program_id=5437

SBA Administrator Karen Mills Business Journal New, May 16, 2009

“ARC loans are for viable businesses that need some help today to pay interest and principal on an existing non-SBA loan.”

“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.”

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.”

SBA 7(a) Loan

For Small Businesses - Typically for new businesses, lack of earnings history, insufficient collateral, longer terms.

Applicant goes directly to bank, bank applies to SBA, bank closes and services loan, SBA pays guaranty if default.

Lender makes loan under SBA guidelines:Loans up to 150,000 – 85%Loans over 150,000 – 75%

SBA 7(a) Loan

SBA guidelines (continued):Max. guaranty is 1.5 millionMax. loan size is 2 millionRate 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)

SBA 504 Loan Program

Suited for larger capital expansion projects, 50/40/10 structure is typical; designed to facilitate job creation.

1.5 MM for regular loans, 2.0 MM for public policy loans, 4.0 MM for small manufacturer loans.

Recovery Act changes include elimination of guarantee fees and increase of guarantee percent, waives processing and third party participation fees, etc.

SBA Portland District Contacts

Dennis Lloyd, Lead Lender Relations Specialist:

503-326-5205.

Russ Hooker , Lender Relations Specialist:

503-326-5200. E-mail: [email protected]

USDA - Farm Service Agency (FSA)

Provides loans, loan guarantees and business planning to eligible farmers, ranchers and others to support a thriving agricultural economy.

Up to 90% or 95% of Guarantee of:PrincipleAccrued InterestFSA Authorized Protective AdvancesAny Subsidy Payment Due (Interest

Assistance)

Types of FSA Guarantees

Annual Operating Loans (operating expenses, family living expenses, debt service payments)

Intermediate Term Operating Loans (capital purchases like machinery and equipment, debt restructuring and refinancing).

Farm Ownership Loans – Purchase or Improve Land or Restructure Debt

FSA Guaranteed Loan Limits, Interest Rates, Loan Terms

Operating Loans or Lines of Credit: $1,094,000Farm Ownership Loans: $1,094,000

Interest Rates must not exceed the rate charged to “average” agricultural loan customer.

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).

Farm Service Agency Contacts

Lynn Voigt, Farm Loan Chief, 503-692-1973 x256 [email protected]

Bob Perry, Farm Loan Specialist, 503-692-1973 x257 [email protected]

Peter Halvorson, Farm Loan Specialist, 503-692-1973 x 255. [email protected]

FSA Website: www.usda.fsa.gov

USDA Rural Development (RD)

An umbrella of federal agencies within USDA serving the needs of

rural AmericaHousing Programs – single & multi-

family housingCommunity Programs – community

facilities & infrastructureBusiness & Coop Programs –

business development

A few of RD’s guaranteed loan programs

1. Business & Industry (B&I) Guaranteed Loans

2. Rural Energy for America (REAP) Guaranteed Loans

3. Community Facilities (CF) Guaranteed Loans

Business & Industry (B&I) Guaranteed Loans

The B&I program is lender-driven. USDA guarantees the loan rather than lending directly.

A commercial lender requests the B&I guarantee, and, if approved, it makes (and services) the loan.

Federal guarantee for lenders on their rural business loans:

80% guarantee on loans up to $5 million70% guarantee on loans from $5-10 millionSize of loans: No minimum, but usually from $200,000up to $10 million.

B&I: Eligible Businesses

Retail ManufacturingWholesale ServiceHotels & motels NonprofitsNurseries Vertically-integrated Timber & forestry agri-businesses

(e.g. wineries)

and Commercial investment property

Retail centers, office buildings, industrial facilities, etc. - No owner-occupancy required.

B&I: Rates and Terms

Negotiated between lender & business

Interest rate: Fixed or variable (quarterly or longer)

Structure: Fully amortized; no balloonsWorking capital – up to 7 yearsEquipment – up to 15 years Real estate – up to 30 years

Prepayment penalty: – OK

Underwriting requirements

The business and its owners must have a good credit history.

The business must have tangible balance sheet equity position at loan closing/project completion: 10% or more (for existing businesses)

= Debt/Tangible Worth ratio of ≤ 9.0 20% or more (for new businesses)

= Debt/Tangible Worth ratio of ≤ 4.0

There must be adequate collateral (Real estate, Accounts receivable , Inventory ) and hazard and life insurance, etc.

Rural Energy for America (REAP) Guaranteed Program

70-85% guarantees on loans up to $25 MM

Loans to:Rural small businesses (SBA definition)Farmers & ranchers

Loans for up to 75% of the cost of:Installing renewable energy systemsInstalling energy eff. improvements

$20,000 Grants for renewable energy generating systems . Deadline is 7-31-09.

Community Facilities (CF) Guaranteed Program

90% guarantees on loans up to $25 million!(Communities of ≤ 20,000 population)

Loans to: Nonprofits Public bodies & Tribes

Loans for: Developing/improving community facilities e.g. hospitals & health clinics, community

centers, emergency vehicles, public schools, museums, etc.

USDA Rural DevelopmentOregon

Portland (State Office)* Pendleton*

Corvallis* Redmond*

Roseburg *

Jeff Deiss, Business & Cooperative Program Director – 503-414-3367

USDA Rural Development, Oregonwww.RuralOregon.biz

OECDD Cornerstones Stimulus Funds Presentation

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Transcript of OECDD Cornerstones Stimulus Funds Presentation