2 Guaranties and Credit Enhancements MIDFA MIDFA Small Business MSBDFA MSBDFA Capital Investment Investment Financing Group Investment Financing Group Investment Financing Group Life Cycle Assistance Incentives MEDAAF MEDAAF Sunny Day Sunny Day Sunny Day
Maryland Venture Fund DBED’s Investment Financing Group provides emerging high-technology business with access to early-stage capital through the: Challenge Investment Program;Challenge Investment Program;Challenge Investment Program;Challenge Investment Program; Enterprise Investment Program;Enterprise Investment Program;Enterprise Investment Program;Enterprise Investment Program; MD Enterprises Venture Capital Limited Partnership InvestmentsMD Enterprises Venture Capital Limited Partnership Investments and administration of theMD Enterprises Venture Capital Limited Partnership InvestmentsMD Enterprises Venture Capital Limited Partnership Investments Maryland Venture Capital Trust.Maryland Venture Capital Trust.Maryland Venture Capital Trust.Maryland Venture Capital Trust. The 2012 Invest Maryland initiative will raise $84 million of state funding of equity investments that will leverage private capital.
Maryland Venture Fund Seed funding for start-up technology companies to cover some of the initial costs associated with bringing a product to market. Focused on biotechnology, information technology, telecommunications, software, cyber security and advanced materials. Grants of $50,000 to $100,000 Since 1994 – 174 investments = $11.6 million The Challenge Investment Program (CIP)
Maryland Venture Fund Direct equity investments in emerging high technology companies that have a patented or proprietary products, manufacturing processes and a marketing strategy in place. Investments range from $150,000 to $500,000 leveraging a minimum 3:1 private sector match. Maintain principal place of business in Maryland Since 1994 – 107 ventures = $44 million 25 exits = $65 million return The Enterprise Investment Program (EIP)
arylandaryland mall usiness evelopment inancing uthorityuthority Created in 1980 to provide financing assistance to promote the viability and expansion of small businesses owned by socially or economically disadvantaged persons that do not meet traditional credit criteria 797 transactions exceeding $175 million 84% of $24 million portfolio is to underserved Operated by Meridian Management Group
1. Contract Financing:Contract Financing Direct loans or guarantee of up to $2 million for working capital and equipment to begin, continue and complete contracts which receive the majority of their funding (51% or more) from any federal, state, or local government agency, or utility regulated by the Maryland Public Service Commission. 2. Guaranty Fund:Guaranty Fund Conventional deficiency loan guarantee of up to 80% not to exceed $2 million or interest rate subsidy of up to 4%. Eligibility includes real estate, equipment, FF&E, and working capital.
3. Surety Bond Program:Surety Bond Program Issuance of bid, performance, and payment bonds up to $5 million for contracts which receive the majority of their funds (51% or more) from any federal, state, or local government agencies or utilities regulated by the Maryland Public Service Commission. May also guarantee up to 90% of a surety’s bond. 4. Equity Participation Investment Program: Direct loans, loan guarantees, and equity investments of up to $2 million for business acquisitions, franchising, and developing technology-based companies. Investments are limited to 49% of the appraised valuation.
MIDFA capabilities to encourage economic development: of Commercial obligations Guaranty / Insurance of Commercial obligations Guaranty / Insurance Premium of ½% per annum of insured portion Premium of ½% per annum of insured portion bonds Issuance of Tax-exempt and Taxable bonds Issuance Issuance fee of 1/8% per annum of principal Issuance fee of 1/8% per annum of principal May also be insured May also be insured Maryland Industrial Development Financing Authority (MIDFA) Created in 1965 to encourage the public / private partnership in economic development projects Completed 856 loans and bonds exceeding $2.4 billion. Fund balance is over $39 million dollars Statutory leverage of 5:1 = $195 million program capacity Projects must be located in a Priority Funding Area
Conventional obligation may be insured up to 80% not to exceed $2.5 million. Typically ranges 20% to 50%. Rapid Response approvals up to $250,000 in 24 hours. MIDFA issued Tax-exempt, Taxable and Energy related bonds can be insured up to $7.5 million not to exceed 100% of the bond. Tax-exempt bonds may finance manufacturing, 501(c)(3) non profits, solid waste recovery and certain private activity port related projects. Maryland Industrial Development Financing Authority
MEDAAF MD Economic Development Assistance Authority and Fund 1. Significant Strategic Economic Development 1. Significant Strategic Economic Development 2. Local Economic Development Opportunities. 2. Local Economic Development Opportunities. 3. Direct Assistance to Local Jurisdictions or MEDCO. 3. Direct Assistance to Local Jurisdictions or MEDCO. 4. Regional or Local Revolving Loan Funds. 4. Regional or Local Revolving Loan Funds. 5. Special Purpose Loans. 5. Special Purpose Loans. Priority Funding Area. Priority Funding Area. Project must be in a Priority Funding Area.Priority Funding Area.
Interest: Target Rate of 3% per annum. Rates of less than 3% may be considered if the project is located in an area of high unemployment as defined by the Department, or if the Department determines that the project is a compelling economic development initiative. May be deferred or waived for first 2 years. MEDAAF Significant Economic Development Opportunities Continued Loan Terms: Real Estate---------------------------Up to 25 years Machinery & Equipment -------- Up to useful life of asset NTE 15 years Furniture & Fixtures -------------Up to useful life of asset NTE 15 years Working Capital Line -------------Renewed annually with a 3 year cap
MEDAAF Forms of Financing: Loans Conditional Loans/Grants Grants Investments (in conjunction with a loan or grant) Local Economic Development Opportunities Continued Maximum Participation: Loans up to $5 million. Grants and conditional loans/grants up to $2 million.
14 Economic Development Opportunities Day Sunny Day Extraordinary economic development opportunities resulting in significant high wage employment and high capital investment by a prominent company. Must be at least investment grade credit risk with proven access to an alternative funding. Recipients must provide a minimum capital investment of at least 5 times the amount of the assistance. Assistance may be repayable loans and forgivable loans. Individual projects range up to $8.5 million over multiple years.
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