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Business Development Corporation August 15, 2012.

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Presentation on theme: "Business Development Corporation August 15, 2012."— Presentation transcript:

1 Business Development Corporation August 15, 2012

2 Small Business Jobs Act of 2010 US Treasury has authorized BDC to utilize up to $15 million to purchase qualified loan participations with financial institutions in SC Program is limited in amount, and it is expected that full utilization of the $15 million will occur rapidly

3 BDC purchases 25% participation in qualified loans Maximum BDC Participation Amount: $1,000,000 (exceptions may apply) Subordinate or equal (pari-passu)--agreed upon at loan inception Lender is responsible for all loan servicing activities. BDC has no direct relationship with borrower.

4 Interest Rate and Fees determined by lender, subject to BDC concurrence. BDC receives pro-rata share of origination fee only (no other servicing fees) Borrower makes one payment, and lender remits pro-rata share of Principal & Interest to BDC (discuss option first out on Principal) No additional cost to borrower No cost to lender to participate in program

5 Small businesses in state of South Carolina* with 500 or fewer employees** Total loan request of $5 million or less** For profit and non-profit companies eligible *Business must have primary place of business in SC. Operations in other states permitted. **Larger numbers of employees and larger loans may be considered.

6 Proceeds must be used for a business purpose Examples: working capital, purchase and/or construction of owner-occupied real estate, purchase of equipment, term loan financing, lines of credit, receivables, inventory, trade cycle financing Refinancing of debt currently held with a non- affiliated financial institution is permitted

7 Refinancing of debt currently with same financial institution (exceptions apply) Passive real estate investment Speculative activities Gambling Pyramid Sales Activities prohibited by Federal or State law

8 BDC will either be fully subordinate or equal (pari-passu)as determined at loan inception Lender responsible for all liquidation and foreclosure proceedings

9 Pre-BDC Approval Executed Master Loan Participation Agreement and Master Capital Access Program (CAP) Agreement (separate programs, but both agreements required) Application for Participation Lenders Internal Credit Memo/Approval Package Borrowers Financials (Tax Returns, Interim Balance Sheet and P&L, Credit Report, Personal Financial Statement)

10 Post-Closing Borrower Certification (A condition of participation in this program includes certification from both lender and borrower that neither has been convicted of a sex offense against a minor) Participation Certificate All Bank Closing Documents (Note, Disbursement Authorization, Guarantees, etc.) Borrower Financial Statements to be sent to BDC by lender on annual basis

11 Edwin Lesley 803-744-0301 Ryan Barnes 803-744-0312 Master Participation Agreement, Participation Certificate, Borrower Certification and additional program details and definitions available at

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