1. Office of Self-Governance 2018 Annual Conference Albuquerque, New Mexico
April 26, 2018
Prepared By: M. Alsace LaFramboise,
Southwest Zone Manager

2. Indian Loan Guarantee & INSURANCE Programs
Interior – Assistant Secretary – Indian Affairs
Energy & Economic Development
Division of Capital Investment
NW ZONE – DENVER, CO
EASTERN ZONE – WASHINGTON, DC
SW ZONE – ALBUQUERQUE, NM
ALASKA ZONE – ANCHORAGE, AK
Indian Loan Guarantee & INSURANCE Programs

3. Program Legal Authority
Indian Financing Act of 1974, 25 U.S.C et.seq. (Public Law , 88 Stat. 77), as amended
The borrower must be :
an Indian individual;
an Indian-owned business entity, with a structure acceptable to BIA;
a tribal enterprise; or
a tribe
Insured loans -
Fast and simple - Bank approves the loan
No BIA review required – up to $250,000
Lower premium fee
Repayment source after liquidation
BIA can insure loans of up to $250,000 without prior review or approval of the specific loan.
BIA can insure loans of up to:
$500,000 for an individual Indian, or
More for an acceptable Indian business entity.
Interest Subsidy is available for a maximum of 5 years.

4. Program Regulations
Title 25: Indians Part 103: Loan Guaranty, Insurance and Interest Subsidy 25 CFR –
The borrower must be :
an Indian individual;
an Indian-owned business entity, with a structure acceptable to BIA;
a tribal enterprise; or
a tribe
Insured loans -
Fast and simple - Bank approves the loan
No BIA review required – up to $250,000
Lower premium fee
Repayment source after liquidation
BIA can insure loans of up to $250,000 without prior review or approval of the specific loan.
BIA can insure loans of up to:
$500,000 for an individual Indian, or
More for an acceptable Indian business entity.
Interest Subsidy is available for a maximum of 5 years.

5. Purpose of Program
Act as financial intermediary to facilitate Indian-owned businesses that will benefit a reservation-based economy
Facilitate movement of private sector debt capital into Indian Country
Enhancement of credit in order to obtain better loan availability and terms

6. Borrower Eligibility Enrolled member of a federally recognized Tribe
Tribal Enterprise
Indian-Owned Business Entity
Partnership
Corporation or Limited Liability Corporation*
Must be majority owned (51%) by Indian Individual, Tribe or Tribal Entity
*Business structure must be acceptable to Indian Affairs*

7. Borrower’s Equity Requirement
20% percent equity in the Business Financed based on Total Project Cost Cash and/or Unencumbered Assets

8. Business Location Business Financed must contribute to:
Economy of Reservation
Tribal Service Area

9. Loan Terms
Term based on purpose of loan – Normally based on useful life of asset
Permanent working capital
Line of credit - revolving
Construction loan
Initial Inventory Purchase
Equipment purchase
Real estate
Lines of Credit must be paid to zero on annual basis
Term cannot exceed 30 years

10. Interest Rates Must be reasonable
Comparable to rates charged for loans to similar businesses
May be variable based on an indexed prime rate that is identified in lender’s guaranty request

11. Loan Amounts Statute Policy
No ceiling/floor for loans to acceptable business structures such as corporations, LLCs, partnerships, etc.
$500,000 - Sole Proprietorship – Individuals
Policy
Loans to Tribal Entities & Indian Business Entities are limited by annual appropriations

12. Percentage of Guaranty
Up to 90% of
Principal and Accrued Interest
Percentage of Insurance
Lesser of
15% of lender’s insured portfolio or
90% of defaulted loan amount

13. Cost of Guaranty & Insurance
Lenders pay a 2% premium based on the guaranteed portion of loan
Lenders pay a 1 % premium based on 90% of insured amount of loan
Lenders may pass cost on to borrower:
Premium cost may be added principal amount of loan

14. FY 2018 Appropriation $122,500,000 Congressional Appropriations will
Support Loan Guaranties and Insurance totaling
$122,500,000
Nationwide

15. Approval Authority DCI – Washington, DC (Central Office)
As recommended by Credit Committee consisting of zone employees and contractors

16. Lender Participation Requirements
Traditional Bank Lenders
Federally Chartered Institutions
State Chartered Institutions
Non-Bank Lenders
Regularly engaged in making loans
Capable of evaluating & servicing loans
Acceptable to Indian Affairs

17. Benefits of Guaranty New Market – Indian Country
Minimizes Lender’s Risk
Guaranteed portion of loan:
Does not count against Lender’s legal lending limit
Can be sold in secondary market
Meets requirements of Community Reinvestment Act
Liquidation is optional in event of default

18. Application Process Borrower Prepare a Business Plan Shop your Loan
Management
Marketing
Money
Shop your Loan
Banks
Non- traditional lenders (CDFIs)

19. Application Process Lender Loan Guaranty Agreement – BIA Form 5-4753
Submit to DCI, Southwest Zone, Albuquerque
BIA Form – Loan Guaranty Request
Lender’s Credit Analysis to include
terms
conditions
Justify why guaranty is needed
Applicant’s Business Plan with supporting documentation

20. Application Process DCI - Indian Affairs Conduct independent analysis
Work directly with lender to address concerns
Approval/disapproval

21. SERVICING RESPONSIBILITIES:
NORTHWEST ZONE
SERVICING RESPONSIBILITIES:
WISCONSIN
MINNESOTA
MICHIGAN
IOWA
KANSAS
NEBRASKA
SOUTH DAKOTA
NORTH DAKOTA
MONTANA
WYOMING
COLORADO
IDAHO
OREGON
WASHINGTON

22. Southwest Zone
Servicing Responsibilities: Utah Nevada California Arizona New Mexico Texas

23. SERVICING RESPONSIBILITES:
EASTERN ZONE
SERVICING RESPONSIBILITES:
Maine
New York
Massachusetts
Connecticut
North Carolina
Florida
Mississippi
Louisiana
Oklahoma
Texas
Alabama

24. SERVICING RESPONSIBILITIES: ENTIRE STATE OF ALASKA
ALASKA ZONE
SERVICING RESPONSIBILITIES: ENTIRE STATE OF ALASKA

25. Contact Information
Alsace LaFramboise, Zone Manager Telephone: Cell: Jerry Ryburn, Contractor Telephone: Cell:

26. 1011 Indian School Road, Suite 131
Mailing Address
Capital Investment
Southwest Zone
Indian Energy & Economic Development Assistant Secretary - Indian Affairs
1011 Indian School Road, Suite 131
Albuquerque, NM 87104