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FEDDEV SODP LOAN PROGRAM DK Phillips Consulting Inc.

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Presentation on theme: "FEDDEV SODP LOAN PROGRAM DK Phillips Consulting Inc."— Presentation transcript:

1 FEDDEV SODP LOAN PROGRAM DK Phillips Consulting Inc.

2 Program Eligibility Commercial enterprise – public & private Commercial enterprise – public & private Small to medium-sized enterprises Small to medium-sized enterprises SME = Less than 1000 employees SME = Less than 1000 employees Southern Ontario location Southern Ontario location

3 Not Eligible Retail/wholesale Retail/wholesale Real estate Real estate Government services Government services Accommodations and food services Accommodations and food services Personal services Personal services

4 Eligible Projects Construction / acquisition of building – NO!! Explain Construction / acquisition of building – NO!! Explain Machinery and equipment for project Machinery and equipment for project Working capital requirements for expansion Working capital requirements for expansion Site improvements - land clearing & paving Site improvements - land clearing & paving Leasehold improvements required for project Leasehold improvements required for project Leased equipment & expenses under conditional sales Leased equipment & expenses under conditional sales Patent searches, patents, trademarks, licenses Patent searches, patents, trademarks, licenses Start up costs - Insurance and interest Start up costs - Insurance and interest

5 Project Costs - Funding Hard costs – 50% Capital Projects Hard costs – 50% Capital Projects Soft costs – 75% funding Soft costs – 75% funding Marketing & Training Marketing & Training Quality & Productivity improvements Quality & Productivity improvements Research and Development Research and Development Consultant advice Consultant advice Contract bidding Contract bidding Business development proposal Business development proposal Business support Business support

6 Project Assessments Economic development, innovations, and diversification Economic development, innovations, and diversification Economic impact – city, region, provincial, federal Economic impact – city, region, provincial, federal Long term economic viability of project Long term economic viability of project Incremental nature of assistance Incremental nature of assistance Demonstrated financial need – objective evidence Demonstrated financial need – objective evidence Applicants management capacity Applicants management capacity Track record and viability of enterprise Track record and viability of enterprise Applicants financial contribution 10-20% Applicants financial contribution 10-20% Leveraging of commercial financing / equity infusion Leveraging of commercial financing / equity infusion Level of risk Level of risk Adverse impacts Adverse impacts

7 FEDDEV Ontario Priority Competitiveness and Productivity Competitiveness and Productivity Management consultantsManagement consultants Hiring technology expertsHiring technology experts Advanced manufacturingAdvanced manufacturing Innovation and Commercialization Innovation and Commercialization Research and DevelopmentResearch and Development Export StrategiesExport Strategies Adopt leading edge technologiesAdopt leading edge technologies Community Development & Economic Diversification Community Development & Economic Diversification Strategic planningStrategic planning Business incubatorsBusiness incubators Technology and innovation parksTechnology and innovation parks

8 Critical Information Demonstrate 1) Business Need and 2) Business Impact Demonstrate 1) Business Need and 2) Business Impact Loans are offered at 0% interest rate though FEDDEV Loans are offered at 0% interest rate though FEDDEV Commence loan repayment prior to Year 3 – Continuous Commence loan repayment prior to Year 3 – Continuous Loan term negotiable – Keep consistent with commercial lenders Loan term negotiable – Keep consistent with commercial lenders SODP wants to see good ROI/Payback – (i.e months) SODP wants to see good ROI/Payback – (i.e months) 10-20% Skin in the Game – Cash (i.e. bank statement ) 10-20% Skin in the Game – Cash (i.e. bank statement ) 30-40% debt or equity financing up to 50% (i.e. term sheet) 30-40% debt or equity financing up to 50% (i.e. term sheet) Balance of 50% from FEDDEV - higher if soft costs involved Balance of 50% from FEDDEV - higher if soft costs involved

9 Critical Information No security requirements – No personal or Corporate guarantees No security requirements – No personal or Corporate guarantees Financials – Review Engagement or Audited Statements Financials – Review Engagement or Audited Statements Notice to Reader – FEDDEV considers risk Notice to Reader – FEDDEV considers risk Business Case profile – soft costs 75% Business Case profile – soft costs 75% Business Plan profile – anything above $25K guideline Business Plan profile – anything above $25K guideline First round of funding – incremental upon receipt of application First round of funding – incremental upon receipt of application $40M 1 st round – timing October 2 nd – December 1 st, 2009 $40M 1 st round – timing October 2 nd – December 1 st, 2009

10 Good Projects Favour SMEs in cities under 500,000 population Favour SMEs in cities under 500,000 population Favour projects starting prior to March 31, 2010 Favour projects starting prior to March 31, 2010 No - Bricks and mortar No - Bricks and mortar Leasehold improvements, innovations, technology, R & D Leasehold improvements, innovations, technology, R & D Jobs, jobs, jobs – Canadian jobs for export growth Jobs, jobs, jobs – Canadian jobs for export growth Demonstrate economic benefits – City, region, province Demonstrate economic benefits – City, region, province Bring in 75% soft costs – R & D, consultation, Lean Mfg. Bring in 75% soft costs – R & D, consultation, Lean Mfg. Have solid ROI/payback calculations Have solid ROI/payback calculations Approach the FEDEV without desperation – 60/40 Approach the FEDEV without desperation – 60/40

11 FEDDEV SODP $ 40M released for first round of funding $ 40M released for first round of funding FEDDEV applications after December 1 st FEDDEV applications after December 1 st $60M allocated by end of December 2010 $60M allocated by end of December 2010 Continue to put in applications after December 1 st Continue to put in applications after December 1 st Allowed to stack grants/funding, loans up to 50% Allowed to stack grants/funding, loans up to 50% for full details for full details


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