Transcript Slide 1

SMALL BUSINESS FINANCING
Division of Neighborhood Revitalization
Martin O'Malley
GOVERNOR
Anthony G. Brown
LT. GOVERNOR
Raymond A. Skinner
SECRETARY
Clarence J. Snuggs
DEPUTY SECRETARY
Business Lending Programs
• Neighborhood BusinessWorks Loan Program
• Microenterprise Loan Program
• Linked Deposit
• Maryland Capital Access Program
NEIGHBORHOOD REVITALIZATION
Linked Deposit Program
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Program is for Certified Minority Business Enterprises (MBEs) reducing the
interest rate on loans from participating banks
Businesses certified by the Maryland Department of Transportation (MDOT) as
a Minority Business Enterprise (MBE) are eligible
2% interest rate reduction on loans from enrolled financial institutions
First National Bank, The Columbia Bank, Industrial Bank
Loans are underwritten and approved by the financial institution
Maryland State Treasurer’s office deposits matching funds in a CD at the
lending institution
Loans may not exceed $1 million
Loan terms can not exceed 10 years
Points charged by lender can not exceed 1%
Project or activity must be in Maryland
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Neighborhood Business Works Loan Program
Program provides gap financing to new or expanding small
businesses and nonprofit organizations in Sustainable
Communities throughout the State
Loans from $10,000 - $500,000
No more than 50% of total project cost
Loan terms from 5 – 15 years
Interest rates from 3% - 5%
Minimum 5% of total project cash contribution from applicant
75% collateral coverage and personal guarantees required
Primary lender required
This loan is underwritten and funded by the State
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Maryland Capital Access Program (MCAP)
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Program allows lenders to make loans that fall slightly outside of their normal
credit guidelines.
A loss reserve account is created to strengthen applications with weak credit or
collateral
Lender, Borrower, and DHCD creates a loss reserve account at the lending
institution for 6% of the loan amount.
The lender contributes 1.5%, the borrower contributes 1.5%, and DHCD puts in
3%
Program lenders – BB&T and PNC
The borrower applies directly to one of the lending institutions
The loan is underwritten and funded by the lending institution
Eligible loan amounts are from $10,000 - $1 million
Any type of commercial loan qualifies, lines of credit and term loans
Micro Lending Loan Program
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Program provides financing to new or existing small businesses
and nonprofit organizations in Sustainable Communities
throughout the State
Loans from $5,000 - $35,000
Loan terms up to 5 years
Interest rates competitive
collateral and personal guarantees required
This loan is underwritten and funded by the State
Eligible Applicants
•Maryland-based small businesses (small business as defined by the
U.S. Small Business Administration)
•Nonprofit organizations whose activities contribute to a broader
revitalization effort and whose projects are intended to promote
investment in commercial districts or town centers
•Commercial Property Owners
•Commercial Property Tenants
•Developers
•Note: Local governments are not eligible applicants.
NEIGHBORHOOD BUSINESSWORKS
• Eligible Projects/Use of Funds
• New construction or rehabilitation
• Leasehold improvements
• Real estate acquisition
• Manufacturing
• Retail/Franchise
• Market/Planning/Feasibility studies
• Machinery and equipment
• Furniture, fixtures and equipment
• Working capital
Neighborhood BusinessWorks
Program provides gap financing to new or expanding small businesses
and nonprofit organizations in designated Sustainable Communities
throughout the State
•Eligible uses: Commercial building rehab or leasehold improvement,
equipment & furniture, inventory and working capital
•Loans from $10,000 - $500,000
•Financing up to 50% of the total project cost
•Commitment for other 50% of project must be committed
•Loan terms from 5 – 15 years - Interest rates from 3% - 5%
•Minimum 5% of total project as cash contribution from applicant
•Minimum 75% collateral coverage and personal guarantees required
•This loan is underwritten and funded by the State
Sustainable Communities
Sources & Uses: Itemize how you plan to
fund this project
(A)
Use of Funds
Breakdown of total project costs by funding source:
(B)
Total
Costs
(C)
NBW
Request
(D)
Other
Lender(s)
(E)
Applicant’s
Contribution
Building/Site Acquisition
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Building Construction/
Expansion/Improvements
Pre-Development Costs
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Furniture, Fixtures, Equipment
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Inventory
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Start-up Costs
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Working Capital
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Other (explain)
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TOTAL PROJECT:
*Not to exceed 50% of total project costs.
**Minimum of 5% of total project costs.
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Microenterprise Loan Program
Program provides financing to new or existing small businesses and
nonprofit organizations in designated Sustainable Communities
throughout the State
•Eligible uses: Working capital or other approved business expense
•Loans up to $35,000
•Loan term up to 5 years
•Rates are from 5% - 7%
•Loan underwritten by the State or Intermediary Microlending Partners:
Maryland Capital Enterprises
Economic Development Group
Prince George’s Financial Services
Linked Deposit
Program provides more affordable capital to MDOT certified Minority
Business Enterprises (MBEs) reducing the interest rate on loans from
participating banks for businesses in Maryland
•Eligible uses: business restructuring or and other business expenses deemed
eligible by participating bank and program guidelines
•Borrowers receive a reduced rate that is 2% below market
•Participating banks: First National Bank, The Columbia Bank, Industrial
Bank
•Loans are underwritten and approved by the financial institution
•Maryland State Treasurer’s office deposits matching funds in the amount of
the loan at the lending institution
•Loans may not exceed $1 million or a term of 10 years
•Points charged by lender can not exceed 1%
Maryland Capital Access Program
Program allows lenders to make loans that fall slightly outside of their normal
credit guidelines for businesses located in Priority Funding Areas throughout
the State.
•Eligible uses: Any commercial term loan deemed qualified by lender
•A loss reserve account is created to strengthen applications with weak credit
or collateral
•Lender, Borrower, and DHCD creates a loss reserve account at the lending
institution for 6% of the loan amount.
•The lender contributes 1.5%, the borrower contributes 1.5%, and DHCD puts
in 3%
•Program lenders – BB&T and PNC
•The borrower applies directly to one of the lending institutions
•The loan is underwritten and funded by the lending institution
•Eligible loan amounts are from $10,000 - $1 million
Neighborhood BusinessWorks/Microenterprise
Project: Potomac Gourmet Pantry
Loan Amount: $300,000
Location: Prince George’s County
Jobs Created: 25
Loans Closed: October 2010
Project: Babe (A Boutique)
Loan Amount: $35,000
Location: Baltimore City
Jobs Sustained/Created: 2
Loans Closed: June 2011
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Linked Deposit/Maryland Capital Access
Borrower: Amtrac Railroad
Contractors of Maryland, Inc.
Loan Amount: $431,660
Location: Washington County
Jobs Sustained: 3
Loans Closed: May 2009
Borrower: Ed Paton Insurance
Loan Amount: $75,000
Enrolled by: BB&T
Location: Prince George’s
Jobs Retained: 3
Loan Closed: June 2010
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Neighborhood BusinessWorks Projects
Arrow Bicycle, Hyattsville, MD
Big Bad Woof, Hyattsville, MD
Joie De Vivre, Cambridge, MD
Roscoe’s Neapolitan Pizzeria, Takoma Park, MD
Limerick Pub Wheaton
Before
After
John L Williams Funeral Directors
Baltimore City
Before
After
Pemberton Café Salisbury
Before
After
Joie de Vive Cambridge
Before
After
Neighborhood BusinessWorks
•Since 1996, Neighborhood BusinessWorks has:
•Loaned more than $62 million to 300+ businesses,
creating 6,170 jobs across Maryland and leveraging
$206 million in private investment
•Loaned nearly $16 million to 88 businesses in historic
Main Street Maryland communities
Thank You
For More Information Contact:
Michael Haloskey, Director Business Lending
Phone: 410-514-7237
Email: [email protected]
Cheivelle Hill, Senior Loan Underwriter
Phone: 410-514-7245
Email: [email protected]