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Real Estate and Equipment Loans

The CDC/504 Loan Program provides financing for major fixed assets such as equipment or real estate.

CDC/504 Loan Program Eligibility

To be considered for a Certified Development Company(CDC)/504 loan, applicants must meet these eligibility requirements:

  • Operate as a for-profit company
  • Do business (or propose to) in the United States or its possessions
  • Has a tangible net worth less than $15 million and an average net income less than $5.0 million after taxes for the preceding two years.
  • Loans cannot be made to businesses engaged in speculation or investment in rental real estate.
  • Be an eligible type of business. While the vast majority of businesses are eligible for financial assistance from the SBA, some are not. Check this list of eligible and ineligible types of businesses to see if your company qualifies.
  • Under the 504 Program, Plan to use proceeds for an approved purpose. CDC/504 loan proceeds may be used for the financing of fixed assets like real estate or equipment. This list explains Eligible and Ineligible Use of Proceeds.
  • Not have funds available from other sources. SBA does not extend financial assistance to businesses when the financial strength of the individual owners or the company itself is sufficient to provide all or part of the financing. Both business and personal financial resources are reviewed as part of the eligibility criteria. If these resources are found to be excessive, the business will be required to use those resources in lieu of part or all of the requested loan proceeds.
  • Ability to repay the loan on time from the projected operating cash flow of the business
  • Good character. SBA obtains a “Statement of Personal History” from the principals of each applicant firm to determine if they have historically shown the willingness and ability to pay their debts and whether they have abided by the laws of their community
  • Relevant management expertise
  • Feasible business plan
  • Use of CDC/504 Loan Proceeds

A 504 loan can be used for:

  • The purchase of land, including existing buildings
  • The purchase of improvements, including grading, street improvements, utilities, parking lots and landscaping
  • The construction of new facilities or modernizing, renovating or converting existing facilities
  • The purchase of long-term machinery and equipment

A 504 loan cannot be used for:

  • Working capital or inventory
  • Consolidating, repaying or refinancing debt
  • Speculation or investment in rental real estate

Contacts

2020-09-01T14:36:26+00:00Federal Programs, Loans, SBA|

Distributed Energy Generation Energy Project Financing

The RUS Electric Program can provide loans and loan guarantees to energy project developers for distributed energy projects including renewables that provide wholesale or retail electricity to existing Electric Program borrowers or to rural communities served by other utilities. Electric Program project financing loans follow the same regulatory requirements and processes as do our traditional electric infrastructure loans and loan guarantees (also known as system loans or loans for rural electrification).

Distributed generation projects including generation from renewable resources are providing more power supply options for rural communities. There is growing interest among electric cooperatives to enter into power purchase agreements (PPAs) with project developers or to interconnect distributed generation projects directly into their systems.

Who may apply for financing?

  • Energy project developers for distributed energy projects
  • Electric Program borrowers or other utilities that serve rural areas

How may funds be used?

For project loans, there are three typical situations:

  • Existing borrower (cooperative) owns and operates the project.
  • A project developer builds and operates the project that has PPAs to serve rural customers such as existing RUS borrowers and/or other off-takers.
  • A wholly-owned subsidiary of an existing RUS borrower owns and operates the project and has a PPA with the RUS borrower to take the entire output.

Contacts

Annie Holloway-Jones
USDA Rural Development
Deputy Assistant Administrator Ofc. of Loan Origination & Approval
Annie.jones@wdc.usda.gov
http://www.rd.usda.gov/programs-services/distributed-generation-energy-project-financing

Business and Industry Loan Guarantees

What does this program do?

This program bolsters the existing private credit structure through the guaranteeing of loans for rural businesses, allowing private lenders to extend more credit than they would typically be able to.

Who may apply for this program?

Lenders with legal authority, sufficient experience, and financial strength to operate a successful lending program like:

  • Federal or State chartered banks
  • Savings and loans
  • Farm credit banks
  • Credit unions

What kind of borrower may the lender request a guarantee for?

  • For-profit businesses
  • Nonprofits and cooperatives
  • Federally-recognized Tribes
  • Public bodies
  • Individuals

Are there restrictions on the borrower?

  • Government or military employees may not own more than 20%
  • Majority ownership must be held by US citizens or permanent residents (1)

What is an eligible area?

  • Any area other than a city or town with a population of greater than 50,000 inhabitants and the urbanized area of that city or town.
  • The borrower’s headquarters may be based within a larger city as long as the project  is located in an eligible rural area
  • The lender may be located anywhere
  • Projects may be funded in rural and urban areas under the Local and Regional Food System Initiative

Check eligible addresses for Business Programs

How may funds be used?

Eligible uses include but are not limited to:

  • Business conversion, enlargement, repair, modernization, or development
  • Purchase and development of land, easements, rights-of-way, buildings, or facilities
  • Purchase of equipment, leasehold improvements, machinery, supplies, or inventory
  • Debt refinancing when new jobs will be created and other conditions are met
  • Business and industrial acquisitions when the loan will keep the business from closing and/or save or create jobs

Guaranteed loan funds MAY NOT be used for:

  • Lines of credit
  • Owner-occupied housing
  • Golf courses
  • Racetracks or gambling facilities
  • Churches, church-controlled organizations, or charitable organizations
  • Fraternal organizations
  • Lending, investment and insurance companies
  • Projects involving more than $1 million and the relocation of 50 or more jobs
  • Agricultural production, with certain exceptions (2)
  • Distribution or payment to an individual owner, partner, stockholder, or beneficiary of the borrower or a close relative of such an individual when such individual will retain any portion of the ownership of the borrower

What Collateral Is Required?

Collateral must have documented value sufficient to protect the interest of the lender and the Agency. The discounted collateral value will normally be at least equal to the loan amount. Lenders will discount collateral consistent with sound loan-to-value policy. Hazard insurance is required on collateral (equal to the loan amount or depreciated replacement value, whichever is less).

Maximum Advance Rates
Real Estate: 80% of fair market value
Equipment: 70% of fair market value
Inventory: 60% of book value (raw inventory and finished goods only)
Accounts Receivable:  60% of book value (less than 90 days)

What is the maximum amount of a loan guarantee?

  • 80% for loans of $5 million or less
  • 70% for loans between $5 and $10 million
  • 60% for loans exceeding $10 million, up to $25 million maximum

What are the loan terms?

  • Maximum term on real estate is 30 years
  • Maximum term on machinery and equipment is useful life or 15 years, whichever is less
  • Maximum term on working capital not to exceed 7 years
  • Loans must be fully amortized; balloon payments are not permitted
  • Reduced payments may be scheduled in the first three years

What are the interest rates?

  • Interest rates are negotiated between the lender and borrower, subject to Agency review
  • Rates may be fixed or variable
  • Variable interest rates may not be adjusted more often than quarterly

What are the applicable fees?

  • There is an initial guarantee fee equal to 3% of the guaranteed amount
  • There is an annual renewal fee, currently 0.5% of outstanding principal (3)
  • Reasonable and customary fees are negotiated between the borrower and lender

What are the underwriting and security requirements?

  • The proposed operation must have realistic repayment ability
  • New enterprises may be asked to obtain a feasibility study by a recognized independent consultant
  • The business and its owners must have a good credit history
  • At loan closing/project completion, the business must have tangible balance sheet equity position of:
    • 10 percent or more for existing businesses, or
    • 20 percent or more for new businesses.
  • Key person life insurance may be required and the amount negotiated. A decreasing term life insurance is acceptable
  • Personal and corporate guarantees are normally required from all proprietors, partners (except limited partners), and major shareholders (i.e., all those with a 20 percent or greater interest)

How do we get started?

Applications are accepted from lenders through our local offices year round
Interested borrowers should inquire about the program with their lender
Lenders interested in participating in this program should contact the USDA Rural Development Business Programs Director in the state where the project is located.

Contacts

General Small Business Loans: 7(A)

7(a) Loan Program Eligibility

SBA provides loans to businesses; so the requirements of eligibility are based on specific aspects of the business and its principals. As such, the key factors of eligibility are based on what the business does to receive its income, the character of its ownership and where the business operates.

SBA generally does not specify what businesses are eligible. Rather, the agency outlines what businesses are not eligible.  However, there are some universally applicable requirements. To be eligible for assistance, businesses must:

  • Operate for profit
  • Be small, as defined by SBA
  • Be engaged in, or propose to do business in, the United States or its possessions
  • Have reasonable invested equity
  • Use alternative financial resources, including personal assets, before seeking financial assistance
  • Be able to demonstrate a need for the loan proceeds
  • Use the funds for a sound business purpose
  • Not be delinquent on any existing debt obligations to the U.S. government

Use of 7(a) Loan Proceeds

If you are awarded a 7(a) loan, the loan proceeds may be used to establish a new business or to assist in the acquisition, operation, or expansion of an existing business.

7(a) Loan Amounts, Fees & Interest Rates

The specific terms of SBA loans are negotiated between a borrower and an SBA-approved lender. In general, the following provisions apply to all SBA 7(a) loans.

Loan Amounts

7(a) loans have a maximum loan amount of $5 million. SBA does not set a minimum loan amount. The average 7(a) loan amount in fiscal year 2015 was $371,628.

Fees

Loans guaranteed by the SBA are assessed a guarantee fee. This fee is based on the loan’s maturity and the dollar amount guaranteed, not the total loan amount. The lender initially pays the guaranty fee and they have the option to pass that expense on to the borrower at closing. The funds to reimburse the lender can be included in the overall loan proceeds.

On loans under $150,000 made after October 1, 2013, the fees will be set at zero percent. On any loan greater than $150,000 with a maturity of one year or shorter, the fee is 0.25 percent of the guaranteed portion of the loan. On loans with maturities of more than one year, the normal fee is 3 percent of the SBA-guaranteed portion on loans of $150,000 to $700,000, and 3.5 percent on loans of more than $700,000. There is also an additional fee of 0.25 percent on any guaranteed portion of more than $1 million.

Interest Rates

The actual interest rate for a 7(a) loan guaranteed by the SBA is negotiated between the applicant and lender and subject to the SBA maximums. Both fixed and variable interest rate structures are available. The maximum rate is composed of two parts, a base rate and an allowable spread. There are three acceptable base rates (A prime rate published in a daily national newspaper*, London Interbank One Month Prime plus 3 percent and an SBA Peg Rate).

Lenders are allowed to add an additional spread to the base rate to arrive at the final rate. For loans with maturities of shorter than seven years, the maximum spread will be no more than 2.25 percent. For loans with maturities of seven years or more, the maximum spread will be 2.75 percent. The spread on loans of less than $50,000 and loans processed through Express procedures have higher maximums.

*All references to the prime rate refer to the base rate in effect on the first business day of the month the loan application is received by the SBA.

Percentage of Guarantee

SBA can guarantee as much as 85 percent on loans of up to $150,000 and 75 percent on loans of more than $150,000. SBA’s maximum exposure amount is $3,750,000. Thus, if a business receives an SBA-guaranteed loan for $5 million, the maximum guarantee to the lender will be $3,750,000 or 75%. SBA Express loans have a maximum guarantee set at 50 percent.

Contacts

2020-09-01T00:45:35+00:00Federal Programs, Loans, SBA|

Business Ready Community Grant and Loan Program

This program provides financing for publicly-owned infrastructure that serves the needs of businesses and promotes economic development within Wyoming communities. Eligible projects include water, telecommunications, spec buildings, streets, etc., and can be used to facilitate the expansion, location, retention, or start-up of a committed business (in addition to numerous other projects).

Contacts

2020-09-01T00:45:45+00:00Grants, Loans, Uncategorized|

Grants for Existing Positions

The State of Wyoming offers several programs to support workforce development, and the Buffalo Chamber of Commerce offers direct assistance to Johnson County businesses interested in pursuing them.

Business Training Grants for Existing Positions can provide up to $2,000 per trainee per fiscal year for established Wyoming businesses with existing employees who need a skill upgrade or need re-training in their current occupations.

In order for training to be approved, the business must demonstrate the following:

  • Training will either correct an employee’s skill deficiency or upgrade an employee’s current skill level;
  • There is a direct relationship between the training and the trainee’s occupation or craft;
  • The training is not normally provided by the business;
  • The business will not substitute funds normally provided for training or funds obtained from another source with Business Training Grant funds;
  • There is a need for the skill upgrade provided by the training for the business to remain competitive in the industry or economy; and
  • The skill upgraded provided by the training will:
  • Enhance the business’s productivity, efficiency or profitability;
  • Reduce employee turnover;
  • Enhance employee effectiveness; or
  • Enhance employee wages.

Workforce Development Training Fund
Department of Workforce Services
122 West 25th Street, 2E
Cheyenne, WY  82002
Phone: (307) 777-8650
http://www.wyomingworkforce.org/businesses/wdtf/#existing

Downloads

Workforce Development Training Fund

Business Training Grants for Existing Positions can provide up to $2,000 per trainee per fiscal year for established Wyoming businesses with existing employees who need a skill upgrade or retraining in their current occupations. Business Training Grants for New Positions can provide between $1,000 and a maximum of $4,000 per trainee per fiscal year, depending on the employee’s full-time status and wage amount. Grants for New Positions were developed to assist Wyoming businesses in two ways: Wyoming Business Expansion and New Business Recruitment.

The Pre-Hire Economic Development Grant Program is designed to train skilled workers in a particular business, businesses, or industry. Applications are completed through a partnering of four entities that contribute separate needs or services to the program.

The WDTF is administered by the Wyoming Department of Workforce Services, application forms are available at: www.wyomingworkforce.org.

Website

Wyoming Workforce Development Council

The WWDC is a 30-member board charged with assisting the Governor in directing Wyoming’s workforce development system, ensuring the system is fundamental in supporting robust regional and state economies and producing a high quality, self-sufficient workforce valued by Wyoming employers. Members represent a range of groups including business and industry, organized labor, state Legislature, education, social service agencies, and others who have a stake in employment and training issues. The WWDC regularly assesses Wyoming’s employment needs, advises the Governor on setting performance goals and priorities to improve the workforce development system and helps leaders to shape workforce development policy at the local level. The WWDC has been empowered by the WIOA and the Governor to promote, fund, and oversee Sector Strategies and Career Pathways and Apprenticeships for the State of Wyoming.

Website

Wyoming at Work

Wyoming at Work provides a complete set of employment tools for job seekers in Wyoming. Job seekers and employers can access jobs, resumes, education, training, labor market information.

Website

Wyoming Department of Workforce Services

The Wyoming Department of Workforce Services is a state Agency focused on delivering comprehensive and effective services that build a workforce to meet the changing demands of Wyoming’s diverse businesses, citizens and economy – hence, the Agency’s mission – bridging human and economic development for Wyoming’s future.

Website