EFI SSBCI • Power Point Presentation

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Overview of Florida’s State Small
Business Credit Initiative (SSBCI)
Programs
Jay Robinson
Director, Capital Programs
November 9, 2011
Outline of Presentation
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Overview of Enterprise Florida
Background of Florida’s SSBCI Program
Eligible & Ineligible Loan/Investment Purposes
Eligible & Ineligible Participants
Florida’s SSBCI Programs & How to Apply
 Florida Capital Access Program (FL-CAP)
 Small Business Loan Support Program
 Florida Venture Capital Program
Questions?
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Overview of Enterprise Florida
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Enterprise Florida is Florida’s principal organization devoted to statewide
economic development. In collaboration with a statewide network of regional and
local economic development organizations, Enterprise Florida helps to improve
Florida's business climate, ensuring the state’s global competitiveness.
•
Enterprise Florida assists companies confidentially with their expansion and
location plans by providing:
 Site selection services
 Demographic information
 Incentive information
 Trade leads
 Capital programs
 Much more
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Background of
Florida’s SSBCI Program
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Created as part of the Small Business Jobs Act of 2010, SSBCI was designed by the
federal government to help states strengthen existing loan and equity programs
and/or create new programs that support financing small businesses. Florida
received an allocation of $97,662,349.
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The primary objective of SSBCI is to leverage private capital for Florida's small
businesses. At the end of the five-year program, Florida must show that, taken
together, $10 in new small business lending or investment was generated by every
$1 in SSBCI funding (known hereafter as the "10:1 private capital leverage ratio").
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Accordingly, Florida's SSBCI programs must generate at least $976,623,490 in new
private capital for Florida's small businesses.
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Florida’s
SSBCI Program
Florida’s allocation from the U.S. Treasury will implement the following three
programs:
Florida Capital Access Program
Small Business Loan Support Program
Florida Venture Capital Program
$20,662,349
$33,500,000
$43,500,000
$97,662,349
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Florida’s SSBCI Programs will be available on or before November 24, 2011.
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The portal for accessing the SSBCI-related applications and program information
will be through www.eflorida.com/ssbci.
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Eligible Participants
The list of eligible companies is exhaustive. Some examples include, but certainly are
not limited to:
– Business Services
– Contractors
– Distributers
– Exporters
– Insurance Brokers
– Real Estate Brokers
– Service Companies
– Trucking Companies
– Wholesalers
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Ineligible Participants
The company cannot participate if it is:
– a business engaged in speculative activities that develop profits from
fluctuations in price rather than through normal course of trade, such as
wildcatting for oil and dealing in commodities futures, unless those activities
are incidental to the regular activities of the business;
– a business that earns more than half of its annual net revenue from lending
activities;
– a business engaged in pyramid sales, where a participant’s primary incentive
is based on the sales made by an ever-increasing number of participants.
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Ineligible Participants
Additionally, the company cannot participate if it is:
– a business engaged in activities that are prohibited by federal law or
applicable law in the jurisdiction where the business is located or conducted.
(Included in these activities is the production, servicing, or distribution of
otherwise legal products that are to be used in connection with an illegal
activity, such as selling drug paraphernalia or operating a motel that
knowingly permits illegal prostitution); or
– a business engaged in gambling enterprises, unless the business earns less
than 33% of its annual net revenue from lottery sales.
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Eligible Purposes
The loan/investment proceeds must be used for a “business purpose.” A business
purpose includes, but is not limited to:
– Startup costs
– Working capital
– Business procurement
– Franchise fees
– Equipment
– Inventory
– Owner-occupied real estate
– Purchase, construction renovation or tenant improvements of an eligible
place of business that is not for passive real estate investment purposes
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Ineligible Purposes
The loan/investment proceeds may not be used to:
– acquire or hold passive investments such as commercial real estate
ownership, purchase of securities; or financing lobbying activities,
– repay delinquent federal or state income taxes unless the borrower has a
payment plan in place with the relevant taxing authority; or
– repay taxes held in trust or escrow, e.g. payroll or sales taxes; or
– reimburse funds owed to any owner, including any equity injection or
injection of capital for the business’ continuance.
– Support unguaranteed potions of SBA-guaranteed or other federally
guaranteed loans
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Florida’s
SSBCI Programs
Florida Capital Access Program
Small Business Loan Support Program
Florida Venture Capital Program
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Florida Capital Access
Program (FL-CAP)
The Florida Capital Access Program (FL-CAP) will not be managed by Enterprise
Florida, but by the Bureau of Economic Development of the State of Florida’s
Department of Economic Opportunity. For additional information on FL-CAP, please
contact Stephen Heiman at [email protected]
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Florida Capital Access
Program (FL-CAP)
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FL-CAP is a loan portfolio insurance program that enables lenders to make riskier
loans to small businesses in Florida by making cash contributions to a reserve fund
for each enrolled CAP loan.
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When a loan is originated, the Borrower will contribute a percentage of the loan
(between 2 - 7%) into a reserve fund held by the lender. FL-CAP will match that
contribution by depositing cash into the lender held reserve fund.
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Each CAP reserve fund will be available to the financial institution as cash
collateral to cover losses on all loans within its FL-CAP portfolio.
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$5,000,000 maximum loan amount; no minimum loan amount.
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Florida Capital Access
Program (FL-CAP)
Application Process for FL-CAP
• Applications and the list of participating lenders will be available on or before
November 24, 2011.
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Once applications are available at the Bureau of Economic Development,
Enterprise Florida will have a link to their FL-CAP website on
www.eflorida.com/ssbci.
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Small Business
Loan Support Program
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The Small Business Loan Support Program is designed to provide Florida small
businesses with credit enhancement and other tools to better access commercial
bank and export financing.
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Each transaction will require at a minimum, a matching concurrent private capital
investment or other credit assistance ($1 - for - $1 match).
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To achieve the required 10:1 private capital leverage ratio, the greatest emphasis
will be toward transactions that provide the strongest co-investment and followon private capital investment opportunity.
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The following are subsets of the Small Business Loan Support Program: Loan
Guarantees, Loan Participations, Export Loan Guarantees & Export Direct Loans
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Small Business
Loan Support Program
Loan Guarantees & Loan Participations
• Loan guarantees and loan participations are available to qualified businesses that
demonstrate adequate historical and/or proposed cash flow coverage and other
credit underwriting metrics. However, these transactions will be undertaken to
help mitigate any perceived credit weaknesses.
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Loan guarantees and loan participations will be targeted for transactions ranging
from $250,000 - $5,000,000. The typical loan guarantee or loan participation will
range between 5 - 20% of the total required financing. Only in exceptional
circumstances would loan guarantees or loan participations up to 50% of the total
required financing be permitted.
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The maximum loan term permitted is five years.
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Interest rates and fees are negotiable.
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Small Business
Loan Support Program
Export Loan Guarantees
• Export loan guarantees for Florida's exporting small businesses are available to
assist in facilitating lower-cost export financing.
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An average export loan guarantee of $500,000 or less is targeted, with greater
export loan guarantees permitted in exceptional circumstances. The maximum
term permitted for export loan guarantees is 12 months and the fee(s) are
negotiable.
Export Direct Loans
• Export direct loans of $500,000 or less are permitted, with greater export loan
amounts permitted in exceptional circumstances. The maximum term permitted
for export loan guarantees is 12 months and the fee(s) are negotiable.
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Small Business
Loan Support Program
Application Process for Loan Guarantees & Loan Participations
• To apply for a loan guarantee or loan participation, the Borrower's lending
institution must first e-mail Enterprise Florida at [email protected] to obtain a
two-page pre-qualification application. Borrowers requesting pre-qualification will
be directed to identify a lender to make the request for the pre-qualification
application. Enterprise Florida stands willing to assist companies in identifying
lenders in their area.
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Once it is determined that the transaction fits the general parameters of the
program, Enterprise Florida staff will work with the Borrower's lending institution
regarding the guarantee structure/rates/fees for the proposed transaction and
complete the application. Enterprise Florida will require copies of the complete
underwriting analysis and related corporate and personal financial information
prior to approval by Enterprise Florida.
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Small Business
Loan Support Program
Application Process for Export Loan Guarantees or Export Direct Loans
• To apply for an export loan guarantee or export direct loan, the Borrower must
first e-mail Enterprise Florida at [email protected] to request an application.
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Export loan guarantees will be underwritten by Florida Export Finance
Corporation, working in conjunction with Enterprise Florida.
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Applications will be available on or before November 24, 2011.
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Florida
Venture Capital Program
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Via the Florida Venture Capital Program, the Enterprise Florida-managed Florida
Opportunity Fund will provide equity investments and convertible debt
instruments to emerging Florida companies (or companies locating in Florida) with
perceived long-term growth potential.
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Emphasis will be toward transactions within Florida's targeted industries, which
include:
 Aviation & Aerospace
 Information Technology
 CleanTech
 Life Sciences
 Financial & Professional Services
 Advanced Manufacturing
 Homeland Security & Defense
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Florida
Venture Capital Program
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Equity investments and convertible debt instruments ranging from $1,000,000 $5,000,000 will be targeted, although larger transactions will be permitted in
exceptional cases.
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Each equity investment will require at a minimum, a matching concurrent private
capital investment or other credit assistance. To achieve the required 10:1 private
capital leverage ratio, the greatest emphasis will be toward transactions that
provide the strongest co-investment and follow-on private capital investment
opportunity.
Application Process for the Florida Venture Capital Program
• For application information, please e-mail Florida Opportunity Fund at
[email protected]
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Applications will be available on or before November 24, 2011.
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Questions?
Please direct all inquiries to:
www.eflorida.com/ssbci
[email protected]
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