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INTERMEDIARY RELENDING PROGRAM |
| INTRODUCTION
In 1991, CADDA recognized the need to provide rural areas with attractive financing and was approved for a loan through the Rural Development’s (RD), formerly the Farmer's Home Administration (FmHA), Intermediary Relending Program. In 2001, CADDA recognized the need to further provide rural southeast Georgia with attractive financing and was approved for another loan through the Rural Development’s (RD) Intermediary Relending Program and expanded the area served with the IRP programs. RD assistance is available through CADDA at a reasonable interest rate for business facilities and community development projects in rural areas.
PURPOSE
The purpose of the program is to finance business facilities and community development projects in rural areas (see “Location” section for definition). The funds must be used for community development projects, establishing new businesses and/or expanding existing businesses, creating employment opportunities and/or retaining existing jobs.
ELIGIBILITY
elgible Use of Loan Proceeds
-Land & Building Acquisition -Transportation Services -Construction -Working Capital /Professional Fees -Machinery and Equipment -Pollution Control and Abatement -Leasehold Improvement -Aquaculture
INELIGIBLE USE OF LOAN PROCEEDS
- Relocation - Acquisition (unless jobs are saved or created) - Agricultural Production -
Loan Amount Up to $250,000 or 75% of project cost, total RD exposure per Small Business Concern.
Location The business must be located within one of the following counties: Bryan, Camden, Effingham, Glynn, Liberty (excluding the City of Hinesville), Long, McIntosh, Appling, Bacon, Brantley, Charlton, Evans, Pierce, Tattnall, Ware, and Wayne. . The business may not be located within the inner boundary of any city having a population of 25,000 or more.
Type of Business
Eligible businesses include most operating-for-profit businesses.
Ineligible businesses include:
· Charitable and educational institutions, fraternal organizations, churches, and organizations affiliated or sponsored by churches. · Businesses producing agricultural products. · Community antenna television services of facilities.
OWNERSHIP At least 51 percent of the owners/membership of ultimate recipients must be United States citizens or admitted for permanent residence. Ultimate recipients must be unable to obtain the proposed loan elsewhere at reasonable rates and terms.
LOAN PROGRAM PROCEDURES
Evaluation Once the borrower is approved for eligibility through the program, a RD representative will perform an environmental assessment. While the environmental assessment is being performed, CADDA staff will request further information from the borrower in order to complete and submit the formal application.
Closing and Funding After the loan application has been approved by CADDA Board and all legal documents have been prepared for execution by the borrower, CADDA will fund the loan.
Servicing CADDA will service loans to ultimate recipients in such a manner that will fully protect both CADDA’s interest and the interests of the Government.
LOAN PROGRAM FEATURES
Benefits · Business obtains a loan that is not otherwise available. · Lower interest rates, longer repayment terms, and lower down payment. · No prepayment penalty.
Paperwork CADDA prepares the application for the borrower. The bank is required to provide only a commitment letter for the application.
Interest Rate The interest rate charged to the ultimate recipient is determined by CADDA.
Repayment Terms · Real estate - up to 25 years. · Machinery and equipment - up to 10 years. · Working capital - up to 5 years.
LOAN PROGRAM REQUIREMENTS
Cash Flow The company's adjusted cash flow must be adequate to service the entire debt.
Credit History The company and principal(s) must have satisfactory history of meeting debt obligations in a timely manner.
Management The business must demonstrate that it has experienced management adequate to operate the company successfully.
Collateral and Security Position
· CADDA will require adequate collateral to secure the debt. · Real property securing debt must be appraised by a qualified appraiser using the cost, income, and market approaches. · Personal/corporate guarantees will be required of those persons or entities having ownership in the business; other guarantees may be required. · Secondary collateral may be required, at the discretion of CADDA.
Insurance
· Hazard insurance equal to the market value or the replacement cost of the fixed assets pledged. · Life insurance assignments on the principals equal to the principal loan amount. · Workman compensation insurance for the business. · Flood insurance, if business is in a flood zone.
Fees
· CADDA may charge loan packaging fees of one and one half percent (1-1/2%) of the RD loan amount which is due at or before closing. This fee is a cost to the borrower and may be included in the loan amount. · Legal costs associated with the loan are the expense of the borrower and are due at the closing.
OTHER RD PROGRAMS
If your project does not qualify with the RD IRP loan program, it may qualify under other programs. FOR MORE INFORMATION CONTACT: WEBSITE: www.cadda.com 501 Gloucester St., Ste. 201, Brunswick, GA 31520 |