Regional Economic

1

• Regional Economic
• Development Group
• Since 1978

2
THREE LOAN PROGRAMS

• Revolving Loan Fund Program (RLF)
• SBA 504 Loan Fund Program (SBA 504)
• Intermediary Relending Program (IRP)

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PROGRAM SUMMARIES
Program of Loans
Amount RLF
310 16,293,198 SBA 504
197 56,448,000 IRP
9 _
425,000 TOTAL 516
73,166,198 As of June 30, 2006
Active 188
29,594,823 As of March 31, 2007
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• Loan Security Documentation
• and
• Collection

5
THE 5 Cs OF CREDIT

• Character
• Cash Flow
• Collateral
• Capitalization
• Conditions

C
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COLLATERAL

• Security given as a pledge for the fulfillment of
  an obligation.
• Adequate to provide reasonable assurance of
  repayment in the event cash flow does not permit.
• Must be perfected to be effective

7
TYPES OF COLLATERAL

• Real Estate
• Personal (Chattel)Property
• Other (ie. Guarantee)

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REAL ESTATE

• Mortgage
• Spousal Rights
• Homestead Exemption
• 3 day right of recession
• Abstract Update or Basket Lien Search

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PERSONAL PROPERTY

• Security Agreement underlying written pledge or
  promise for fulfillment or repayment of a loan
• UCC Financing Statement serves as public record
  of the pledge or promise and MUST match security
  agreement.
• Abstract or basket lien search
• UCC lien search

10
WHERE TO FILE

• State where corporation is incorporated
• Filing
• Online ( www.sos.state.ia.us )
• Mail
• Develop standard, then cut paste check
  recheck
• Lien and Tax Search
• County where collateral is located
• Lien Search

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GUARANTEES

• Unsecured
• Secured
• Spousal guaranty

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COLLECTIONS

• Late Letter (10 days)
• Warning Letter
• Notice of Acceleration (Demand Letter)
• Legal Action
• Notice should include
• Specific amount due or in default
• Cure Period
• Include Notice to Guarantor
• Smaller amounts are typically better worked out,
  larger amounts less probable (deeper hole)

13
LOAN AGREEMENT PROVISIONS

• Authorize lender to file and maintain all
  necessary financing statements
• Deficiency of Conditions of Lending Section
• Late payment and NSF Check fee.
• (ie. Minimum 25)
• Promissory Note, Loan agreement, Security
  Agreement and Financing Statements should
  parallel each other

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INNOVATIVE STRATEGIESHIDDEN SECURITY
OPPORTUNITIES

• Vehicles titled and not included under UCC
• Home equity or other real estate held
• Purchase money security interest in certain
  assets
• Disburse funds for project (equipment)
• Financing statement should include, at a minimum,
  make, model serial number
• Debtor must take possession within 20 days

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INNOVATIVE STRATEGIESHIDDEN SECURITY
OPPORTUNITIES

• Life insurance assignment - death benefit and
  cash surrender value
• Intercreditor agreement
• Subordination agreement

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BROCHURES AVAILABLE
Black Hawk Economic Development, Inc. The
Organization Revolving Loan Fund (RLF)
Program SBA 504 Loan Program
IRP Loan Program Credit and
Finance Factors