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WHERE IS THE MONEY ? U. S. DOT Short Term Lending Program PURPOSE: Provides Lines of Credit to finance the Accounts Receivable from transportation related.

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Presentation on theme: "WHERE IS THE MONEY ? U. S. DOT Short Term Lending Program PURPOSE: Provides Lines of Credit to finance the Accounts Receivable from transportation related."— Presentation transcript:

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2 WHERE IS THE MONEY ?

3 U. S. DOT Short Term Lending Program PURPOSE: Provides Lines of Credit to finance the Accounts Receivable from transportation related infrastructure contracts or sub-contracts PURPOSE: Provides Lines of Credit to finance the Accounts Receivable from transportation related infrastructure contracts or sub-contracts COLLATERAL: Primary collateral is proceeds of the transportation contract(s) or sub-contract(s) COLLATERAL: Primary collateral is proceeds of the transportation contract(s) or sub-contract(s) TERM : One year, Renewable each year for up to five years TERM : One year, Renewable each year for up to five years MAXIMUM LOAN AMOUNT : $750,000 MAXIMUM LOAN AMOUNT : $750,000

4 Who is eligible ? A company with a transportation related infrastructure contract in hand A company with a transportation related infrastructure contract in hand Certified as a DBE by an agency applying DOT certification guidelines (49 CFR, Part 23 & 26) or by the U.S. Small Business Administration Section 8(a) program ( Hubzone; Disabled veteran; SDB) Certified as a DBE by an agency applying DOT certification guidelines (49 CFR, Part 23 & 26) or by the U.S. Small Business Administration Section 8(a) program ( Hubzone; Disabled veteran; SDB) In business for at least three years In business for at least three years Demonstrable track record of performing successfully on on similar contracts or sub-contracts Demonstrable track record of performing successfully on on similar contracts or sub-contracts Satisfactory business and personal credit records Satisfactory business and personal credit records Profitable operation and positive financial trends Profitable operation and positive financial trends

5 ELIGIBLE LINE OF CREDIT USE Fund the short term working capital needed to perform on the transportation related contract(s), such as payroll, materials, and overhead costs. Transportation related work involves: Fund the short term working capital needed to perform on the transportation related contract(s), such as payroll, materials, and overhead costs. Transportation related work involves: maintenance maintenance rehabilitation rehabilitation restructuring restructuring improvements or improvements or revitalization revitalization of any of the nation’s transportation modes -- public, commercial, Federal, State, or local agency

6 INELIGIBLE LINE OF CREDIT USE Contract mobilization: expenses incurred prior to performing and invoicing for the work Contract mobilization: expenses incurred prior to performing and invoicing for the work Equipment purchases or other long term uses Equipment purchases or other long term uses Refinancing of existing debt Refinancing of existing debt Payment of non-current taxes; distributions or other payments to stock holders. Payment of non-current taxes; distributions or other payments to stock holders.

7 ADMINISTRATION The STLP is administered by the DOT OSDBU through a cooperative agreement between DOT and Continental National Bank of Miami The STLP is administered by the DOT OSDBU through a cooperative agreement between DOT and Continental National Bank of Miami Loan documentation and financing transactions are performed by Continental National Bank of Miami Loan documentation and financing transactions are performed by Continental National Bank of Miami Joint approval by the Bank and the U S DOT; approximate processing time is four to six weeks. Joint approval by the Bank and the U S DOT; approximate processing time is four to six weeks. Application Package: Application Package:

8 FUND ADMINISTRATION How does it work ? Funds are borrowed against each invoice under the contract(s), up to 85% of the invoice amount, and for up to 90 days. Funds are borrowed against each invoice under the contract(s), up to 85% of the invoice amount, and for up to 90 days. Contracts or sub-contracts are assigned as collateral Contracts or sub-contracts are assigned as collateral Prime Contractor or Project Owner certifies the accuracy of the invoices Prime Contractor or Project Owner certifies the accuracy of the invoices Repayment occurs as the Prime Contractor or Project Owner pays the invoice. Repayment occurs as the Prime Contractor or Project Owner pays the invoice. The payment is made jointly to the Borrower and Continental National Bank and sent to the Bank, who repays the amount borrowed against the invoice and credits the balance to the Borrower’s account at the bank. The payment is made jointly to the Borrower and Continental National Bank and sent to the Bank, who repays the amount borrowed against the invoice and credits the balance to the Borrower’s account at the bank.

9 STLP REQUIREMENTS CONTRACT OR SUB-CONTRACT FOR A TRANSPORTATION RELATED PROJECT IN HAND CONTRACT OR SUB-CONTRACT FOR A TRANSPORTATION RELATED PROJECT IN HAND APPLICATION FEE OF $ payable to the bank APPLICATION FEE OF $ payable to the bank INTEREST RATE – Prime Plus One and ¾ percent, Variable INTEREST RATE – Prime Plus One and ¾ percent, Variable Administration Fee is paid by DOT Administration Fee is paid by DOT

10 CHECHLIST What do I need to provide ? CASH FLOW PROJECTION--to cover term of line -- include assumptions, to establish Line of Credit amount CASH FLOW PROJECTION--to cover term of line -- include assumptions, to establish Line of Credit amount Current Aging of Accounts Receivable & Accounts Payable Current Aging of Accounts Receivable & Accounts Payable Statement of WORK IN PROGRESS Statement of WORK IN PROGRESS

11 CHECKLIST BUSINESS FINANCIAL STATEMENTS AND INCOME TAX RETURNS -- 3 YEARS BUSINESS FINANCIAL STATEMENTS AND INCOME TAX RETURNS -- 3 YEARS PERSONAL FINANCIAL STATEMENT PERSONAL FINANCIAL STATEMENT PERSONAL TAX RETURNS -- 3 YEARS PERSONAL TAX RETURNS -- 3 YEARS

12 BACKGROUND INFORMATION BRIEF HISTORY OF THE COMPANY AND THE EXPECTED BENEFITS TO BE DERIVED FROM THE LINE OF CREDIT BRIEF HISTORY OF THE COMPANY AND THE EXPECTED BENEFITS TO BE DERIVED FROM THE LINE OF CREDIT RESUMES OF ALL OPERATING OFFICERS RESUMES OF ALL OPERATING OFFICERS COMPANY TRACK RECORD: CONTRACTS COMPLETED-- include business/trade reference letters COMPANY TRACK RECORD: CONTRACTS COMPLETED-- include business/trade reference letters

13 CONTRACT INFORMATION PROJECT OWNER’S/CONTRACTOR’S NAME, Address, Contact Name, Telephone/Fax number PROJECT OWNER’S/CONTRACTOR’S NAME, Address, Contact Name, Telephone/Fax number Copy of the EXECUTED “TRANSPORTATION RELATED” CONTRACT(s) OR SUB-CONTRACT(S) Copy of the EXECUTED “TRANSPORTATION RELATED” CONTRACT(s) OR SUB-CONTRACT(S)

14 BUSINESS DOCUMENTS Copy of ARTICLES OF INCORPORATION or other evidence of business entity Copy of ARTICLES OF INCORPORATION or other evidence of business entity COPY OF DBE CERTIFICATION OR 8(a) CERTIFICATION (Hubzone; SBD; or Disabled Veteran) COPY OF DBE CERTIFICATION OR 8(a) CERTIFICATION (Hubzone; SBD; or Disabled Veteran)

15 OTHER BUSINESS DOCUMENTS PRESENT BANK’S name, address, account number, account officer, telephone and fax numbers PRESENT BANK’S name, address, account number, account officer, telephone and fax numbers EXPLANATION OF ANY PAST CREDIT PROBLEMS EXPLANATION OF ANY PAST CREDIT PROBLEMS EVIDENCE OF INSURANCE COVERAGE EVIDENCE OF INSURANCE COVERAGE STATEMENT THAT ALL TAXES HAVE BEEN PAID STATEMENT THAT ALL TAXES HAVE BEEN PAID

16 For an Application Package Contact Frank T. Santana, VP (305) , Ext 3115 Continental National Bank of Miami


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