Microfinance Programs
s. 288.994 & 288.9935, F.S.
The Microfinance Act
• The act consists of two programs: a loan
program and a guarantee program.
–2014 Florida Senate Bill 1480
–2014 Florida House of Representatives
• CS/HB 7023
The Microfinance Loan Program
• Short-term microloans of up to $50,000
to Florida Entrepreneurs and Small
Businesses. The borrower must
participate in business training and
technical assistance provided by the
Florida Small Business Development
Network.
10% Set-aside
• To entrepreneurs and small businesses
that employ no more than five people
and generate annual gross revenues
averaging no more than $250,000 per
year for the last 2 years.
Microfinance Guarantee Program
• Loan guarantees may only be provided
on loans between $50,000 and $250,000,
and a guarantee cannot exceed 50
percent of the total loan amount.
Under Both Programs
• Eligibility is limited to borrowers who are
entrepreneurs or small businesses with
25 or fewer employees and gross annual
revenues of up to $1.5 million.
Borrower Eligibility and Conditions
•
•
•
•
•
•
Must be located in this state.
Application fee of up to $50.
Microloans may be up to $50,000.
Up to 1 year in duration.
Interest rates up to the WJS Prime rate plus 1000 basis points.
A borrower may receive a maximum of $75,000 in total
microloans per year.
• A maximum of two microloans per year.
• Five microloans in a 3-year period.
Microfinance Loan Proceeds
• Proceeds from a microloan can only be
used for startup costs, working capital,
and to purchase materials, supplies,
furniture, fixtures, and equipment.
Not Eligible for Both Programs
• Microloans may not be made if the microloan proceeds will be
used to:
• Pay off creditors
• Provide funds, directly or indirectly, for payment, distribution, or
as a microloan to owners, partners, or shareholders of the
business, except as ordinary compensation for services rendered
• Finance the purchase, construction, or improvement of real
property held for sale or investment
• Pay for lobbying activities
• Replenish funds used for any of the above purposes.
Conditions
• As a condition of receiving a microloan,
the borrower must personally guarantee
the microloan, participate in business
training and technical assistance, and
provide information regarding job
creation and financial data to the loan
administrator.
How can the Loan Administrator make $?
• They are entitled to keep 1% of the total
award amount for Administration costs.
• They are entitled to charge late fees.
• They are entitled to charge collection fees.
• They are entitled to amortize the loan for
multiple years and rewrite the loan after 12
months for another 12 month term.
Potential Target Market
• Businesses that have recently been turned
down by a bank or private lender.
• Businesses that have a great chance of getting
bank financing within 12 to 36 months.
• Businesses that are looking for a short-term
loan until their account receivables come in.
• Businesses that are trying to establish credit.
Goals and Objectives
• To help Entrepreneurs and Small
Businesses in Florida that are currently
un-bankable to become bankable upon
completing the loan program.
Program Partners
Q&A
•
•
•
•
•
•
•
•
•
Garry Thomas, Government Analyst II
Florida Department of Economic Opportunity
Division of Community Development
107 East Madison Street
Caldwell Bldg., MSC 160
Tallahassee, Florida 32399-4135
Phone: 850-717-8479
garry.thomas@deo.myflorida.com
www.floridajobs.org