Draft
June 2013
Western Wisconsin Economic Development Fund
Administrative Manual
This manual describes the policies and procedures on how the funds for business financing would
be managed through the consolidation of county, city and village HUD Community Development
Block Grant revolving loan funds in Western Wisconsin.
Western Wisconsin Economic Development Fund Administrative Manual
Table of Contents
INTRODUCTION ........................................................................................................................................... 1
Section 1. PURPOSE .........................................................................................................................................................3
1.1 U.S. Department of Housing and Urban Development Community Development Block Grant Low and Moderate
Income National Objective and Anti Job Piracy Regulations .........................................................................................4
1.2 Source of Funding From CDBG RLF Counties and Communities..................................................................................4
1.3 Non Discrimination Policy ...............................................................................................................................................4
1.4 Amendments and Modifications ......................................................................................................................................4
SECTION 2. ORGANIZATION AND ADMINISTRATIVE ROLES .........................................................................................5
2.1 A Regional Nonprofit Corporation Will Be Established .....................................................................................................5
2.2 Program Administrator ......................................................................................................................................................6
2.3 Wisconsin Economic Development Corporation (WEDC) .................................................................................................6
2.4 County and Community Loan Committees........................................................................................................................6
2.5 Administration Funding ......................................................................................................................................................7
2.6 Loan Review Meetings ......................................................................................................................................................8
SECTION 3. GENERAL ELIGIBILITY CONSIDERATIONS ..................................................................................................8
3.1 Eligible Area ......................................................................................................................................................................8
3.2 Eligible Applicants .............................................................................................................................................................8
3.3 Eligible Activities ................................................................................................................................................................9
3.4 Ineligible Activities .............................................................................................................................................................9
3.5 Ineligible Businesses .......................................................................................................................................................10
3.6 WWEDF Board and Local RLF Board Loan Decision Making Policies ...........................................................................10
SECTION 4. BUSINESS FINANCING PROGRAMS ............................................................................................................11
4.1 Conventional Loan ..........................................................................................................................................................11
4.2 Micro Loan .......................................................................................................................................................................12
4.3 Facade/Historic Loan Program ........................................................................................................................................13
4.4 Retention and Efficiency Loan.........................................................................................................................................14
4.5 Innovation Fund ...............................................................................................................................................................15
4.6: Loan Payments ..............................................................................................................................................................16
4.7 WWEDF Financing Program Comparison Table ............................................................................................................16
Table 4.1 - Western Wisconsin Economic Development Fund Loan Program General Summary................. 17
SECTION 5.0 PROCESS AND PROCEDURES………………………………………………………………….18
5.1 Loan Application Process ............................................................................................................................................. 18
5.2 Loan Documentation ............................................................................................................................. 19
5.3 Delinquency and Default Procedures ........................................................................................................................... 20
5.4 Use of Loan Repayments and Reporting ...................................................................................................................... 21
5.5 Loan Servicing ............................................................................................................................................................... 21
5.6 Recordkeeping ...................................................................................................................................................... 22
Table 5.1 – WWEDF Organization Decision Flow Chart ................................................................................ 24
Western Wisconsin Economic Development Fund Administrative Manual
Introduction
For over 20 years the State of Wisconsin through their annual allocation of Department of Housing and Urban
Development – Community Development Block Grant (CDBG) funds have awarded counties, cities and villages
funding to assist with significant business expansion projects that leveraged significant private sector investment and
jobs. This funding is how over 200 Revolving Loan Funds (RLFs) in Wisconsin were formed. This funding in the form
of loans to businesses was also how 12 county, city and village RLFs in Western Wisconsin were capitalized. The
Wisconsin Economic Development Corporation (WEDC) in reviewing the large number of local government RLFs
across the State decided to include in their Strategic Plan an initiative to encourage the consolidation of county,
village and city RLFs into regional RLFs to increase business lending and administrative efficiencies. WEDC
estimates that over $75 million is available for lending among the RLFs across the State and $32 million is actively
working.
The Region’s RLFs: The Region’s RLFs have helped fill financing gaps or provided incentive financing for many
business expansions in Western Wisconsin focusing primarily on local projects that were too small for state or federal
programs. The RLFs have created many jobs and leveraged millions in private investment in the region. The
following is a summary of the RLFs in the region based on a June 30, 2012 report from WEDC.
 12 Revolving Loan Funds in the region
 Counties with RLFs: Pierce, Pepin, Buffalo, Jackson, La Crosse, Monroe, and Vernon
 Cities and Villages with RLFs: Sparta, Tomah, Kendall, Hillsboro and Osseo
 Total cash available to lend by all RLFs: $3 Million
 Total amount owed to all RLFs: $5.7 Million
 Average Loan Size $75,000 - $85,000
 Loan Range $10,000 - $200,000
 During the last 6 month reporting period 6 loans were made among the 12 RLFs
Federal Regulations Limit Local RLF Lending Flexibility but a Regional RLF can be “De-Federalized” Providing More
Lending Opportunities and Flexibility: U.S. Department of Housing and Urban Development (HUD) requirements
impose a variety of regulations limiting use of a Local RLF, but HUD and WEDC have an agreement whereby these
regulations can be lifted or “de-federalized” if the local RLFs are consolidated into a regional RLF. The reason for this
de-federalization is that some of consolidated regional funds have met their original federal objective regarding jobs
and low and moderate income benefits and the federal strings do not have to be tied to these funds forever but can
be cut and used in a more opportunistic and flexible manner. The following are a list of federal regulations and issues
that eventually would be lifted on some of the local funds that are consolidated into a regional RLF.
 Federal Davis-Bacon wage regulations on real estate construction projects.
 Screening job applicants income status to adhere to hiring at least 51% Low and Moderate Income (LMI)
persons
 Requirement that a RLF loan must be in combination with a private lender and have a certain equity
investment.
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
Reporting on the performance of all the funds could be conducted in a more efficient manner, instead of
multiple reports from all the RLFs in the region, one regional report would be required that would use
modern RLF reporting software, reducing the administrative burden for the local RLFs and the State.
Forming a Western Wisconsin Regional Revolving Loan Fund: To increase lending, reduce the administrative
burden on local RLFs and maintain the region’s competitiveness with other regions of the state (At least four other
multi-county regional RLFs have already formed in Wisconsin since 2006 and more are in the process of forming) the
Wisconsin Economic Development Corporation (WEDC) sponsored the first regional RLF meeting in Western
Wisconsin on January 31st 2012. Since then thru May 23, 2013, ten meetings and two teleconferences were held with
participating counties, communities and economic development organizations. During these meetings opinions on the
creation of a regional RLF were varied but two key concerns were expressed. They were: (1) For a Regional RLF to
be accepted in Western Wisconsin local decision making on loans needed to be incorporated into the Regional RLF
structure and (2) Safeguards needed to be established to prevent an unusually high concentration of funds being
loaned to any one county or community.
To accommodate these concerns the proposed administrative structure for a Western Wisconsin regional RLF as
described in this Manual involves a regional board that would make loan decisions on loans of $200,000 or more,
since this would be a significant amount of the total funds available for lending. The Regional Board would be
comprised of one board member appointed from each county revolving loan fund committee. The County or
Community RLF Loan Committees would make loan decisions on loans less than $200,000. Lending thresholds have
also been established based on a county’s population or the amount of funds contributed to safeguard a high
concentration of lending going to any one county. The Regional RLF will also contract with a program Administrator
to market and administer the fund in a uniform manner throughout the region. The following persons are
acknowledged for taking the time to attend one or more of the meetings and providing valuable input into this regional
RLF administrative manual.
Regional Revolving Loan Fund Meeting Participants
Terry Mesch, Pepin County Economic
Development
Rachel Hansen, Vernon County
Treasurer
Adam Sontag, Hillsboro City
Administrator
Sara Westbrook, La Crosse Area
Development Corporation
Herbert Cornell, Vernon County Board
Chair
Ken Witt, Sparta City Administrator
Jo Ann Miller, Pierce County
Administrator
Roger Niefieldt, Vernon County RLF
Committee
Lynn Hanson, Kendall Village Clerk
Chris Hanson, Tomah Chamber of
Commerce
Nancy Jaekel, Vernon County RLF
Committee
Amy Rindahl, City of Osseo, Treasurer
Brian Fukuda, Community Development
Specialist, La Crosse County
Bill Warner, Pierce County Economic
Development Corporation
Jeff Goelke, Vernon Economic
Development Association
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David Connolly, Crawford County
Economic Development Corporation
Vicki Markussen, Seven Rivers Alliance
Bryan Law, Mississippi River Regional
Planning Commission
Ann Hlavacka, UW La Crosse Small
Business Development Center
Cathy Schmidt, Monroe County
Administrator
Sharon Folcey, Monroe County Board
Richard Yarrington, City of Tomah
Del Twidt, Buffalo County Board Chair
Amy Peterson, City of La Crosse
Ron Carney, Jackson County Supervisor
Karl Green, La Crosse County, UW
Extension
Brenda Hicks Sorensen, Wisconsin
Economic Development Corporation
Chela O Connor, Wisconsin Economic
Development Corporation
John Severson, Viroqua City
Administrator
Pam Kolasinski, Wisconsin Economic
Development Corporation
Jim Hill, La Crosse Area Development
Corporation
Greg Flogstad, Mississippi River
Regional Planning Commission
Will Cronin, Monroe County UW
Extension
Pat Malone, UW Extension Trempealeau
County
James Bialecki, Tomah City
Administrator
Roger Gorius, Tomah City,
Administrator
Section 1. PURPOSE.
The purpose of the policies and procedures contained within this manual, hereafter referred to as the Western Wisconsin Economic
Development Fund (WWEDF) Administrative Manual, is to present how the economic development activities from funds made
available through the consolidation of state awarded Community Development Block Grant (CDBG) Revolving Loan Funds (RLFs)
within Western Wisconsin and other approved sources of funding are to be governed. These CDBG funds originated from the U.S.
Department of Housing and Urban Development’s Small Cities Program. Western Wisconsin shall include the following counties:
Buffalo, Crawford, Jackson, La Crosse, Monroe, Pepin, Pierce, Trempealeau, and Vernon.
The WWEDF shall serve as an economic development financing program for businesses in Western Wisconsin that is intended to
meet the following objectives:
a. To provide funding opportunities to businesses to help meet their diverse capital utilization needs.
b. To provide employment opportunities for low and moderate income persons, see Section 1.1
c. To encourage the creation and retention of permanent jobs that provide quality wages and benefits
d. To encourage the leveraging of new private and public investment in Western Wisconsin
e. To increase the tax base for communities in Western Wisconsin
f. To perpetuate a positive and proactive business climate that encourages the retention and expansion of existing businesses
and helps to attract desirable new businesses.
g. To foster business entrepreneurs and high technology
h. To develop a higher knowledge and skilled workforce
i. To maintain and promote a diverse mix of employment opportunities and reduce employment fluctuations
j. To promote agricultural, commercial and industrial development in Western Wisconsin
k. To encourage the development and use of modern technology and create safe and healthy work environments
l. To encourage an environmentally sensitive and sustainable business community
m. To implement the economic development goals and objectives of Western Wisconsin communities, counties and regional
organizations.
n. To contribute a positive economic development benefit rather than maximizing return on investment.
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1.1 U.S. DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT COMMUNITY DEVELOPMENT BLOCK GRANT LOW AND
MODERATE INCOME NATIONAL OBJECTIVE AND ANTI JOB PIRACY REGULATIONS.
Some of the funding of the WWEDF is subject to the U.S. Department of Housing and Urban Development - Community
Development Block Grant low and moderate income national objective and anti-job piracy regulations. Therefore the following terms
and conditions apply to recipients and projects receiving funds from the “federalized” pool of funds.
a. A Project shall create jobs, at least 51% of the jobs will be held by or made available to Low and Moderate
Income (LMI) persons.
b. “LMI Persons” means persons with household income less than eighty (80) percent of the median household
income by family size in the County where the Project is located.
c. “Made Available to LMI Persons” means the Borrower will document that at least 51% LMI Persons were hired or
Received First Consideration by interviewing at least 51% LMI Persons for created positions that do not require
special skills or education beyond high school.
d. “Received First Consideration” means the Borrower must document and use a hiring practice that results in at
least 51% LMI Persons interviewed for created positions and demonstrate that under usual circumstances this
hiring practice will result in at least 51% LMI persons being hired. Part of the Borrower’s hiring practice must
include the posting of available positions with the local Job Service Office or Workforce Development Boards.
e. The following documentation evidencing compliance must be collected. A listing of all job titles which were
planned to be held by or made available to low to moderate income persons, a commitment to hire or make at
least 51% of jobs available to low to moderate income persons, a written plan for how such persons were given
first consideration for jobs including what hiring process was used, a list of the low to moderate income persons
interviewed for particular positions, including the size and annual income of the person’s family prior to
interviewing for the position.
f. Every applicant for an employment position associated with a Project must complete the self-certification form
included as an addendum to this Manual.
g. The borrower must certify that it does not have immediate plans to relocate jobs in violation of CDBG Anti-Piracy
regulations. The following language will be included in all agreements with the borrower. “The Borrower certifies it
is and will maintain compliance with CDBG Anti-Piracy regulations as stated in 24 CFR 570.482(h). Violation of
this regulation will constitute an Event of Default.” To implement this provision the following language shall be
included in all loan agreements with the borrower. “The borrower certifies it is and will maintain compliance with
CDBG Anti-Piracy regulations as stated in 24 CFR 570.482(h). Violation of this regulation will constitute an Event
of Default.
1.2 SOURCE OF FUNDING FROM CDBG RLF COUNTIES AND COMMUNITIES.
Funding for the WWEDF is to come from State Community Development Block Grant (CDBG) Revolving Loan Funds within Western
Wisconsin. If all State funded CDBG RLFs in western Wisconsin decide to participate in the WWEDF the funding sources would
include the Counties of: Pierce, Pepin, Buffalo, Jackson, La Crosse, Monroe, and Vernon; the cities of Sparta, Tomah, Osseo and
Hillsboro; and the Village of Kendall.
1.3 NON DISCRIMINATION POLICY.
The WWEDF Board, Program Administrator, County Loan Committee, or Community Loan Committee shall not discriminate in
making financing decisions on the basis of age, race, religion, color, handicap, sex, physical condition, development disability as
defined in Wisconsin Statute 51.01(5), sexual orientation or national origin.
1.4 AMENDMENTS AND MODIFICATIONS.
The WWEDF Board may amend the provisions in this manual. Any amendments must comply with Wisconsin Economic
Development Corporation agreements and with this Western Wisconsin Economic Development Fund Manual approved by
participating counties, cities and villages.
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SECTION 2. ORGANIZATION AND ADMINISTRATIVE ROLES.
2.1 A REGIONAL NONPROFIT CORPORATION WILL BE ESTABLISHED. A regional non-profit corporation called the Western
Wisconsin Economic Development Fund (WWEDF) shall be established to manage the WWEDF. It will: accept the CDBG-funded
RLF funds from the participating RLF counties, cities and villages in Western Wisconsin; assume the RLF loans and legal
responsibilities from the RLF counties, cities and villages; and act as the oversight board. It will also administer this regional RLF in
accordance with the policies and procedures of this manual.
The WWEDF Board shall review and adjust policies and procedures to meet the needs of the WWEDF and the financing needs of
business in its service area. The WWEDF Board shall review loan performance activity reports.
The WWEDF Board shall enter into an administrative agreement to establish a regional revolving loan fund from the consolidation
of the county, city and village revolving loan with the Wisconsin Economic Development Corporation.
The WWEDF Board shall entertain request for proposals and/or undertake the research needed to determine what FDIC insured
financial institution(s) it will deposit its funds in. Criteria for choosing a financial institution shall include but not be limited to: rate of
return on deposits, terms and conditions of financial services offered, cost of financial services offered, and security of deposits.
The WWEDF Board shall select and contract with a Program Administrator to manage the WWEDF. County Loan Committees and
Community Loan Committees may utilize the Program Administrator to analyze or guide loan applications when they come to the
County and Community Loan Committees or they may rely on their local RLF administrator.
The WWEDF Board shall approve all administrative costs, loan fees, litigation costs and deficiency judgments.
The WWEDF Board subject to Section 5.3 shall approve all loan collection actions regarding delinquency, default, business or
collateral foreclosure, repossession, bankruptcy and any other legal actions influencing loan collection.
The WWEDF Board shall set the administrative costs and loan fees so they are uniform throughout the WWEDF service area.
The WWEDF Board shall establish marketing activities and material that are uniformly applied throughout the WWEDF service area.
The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The interest rates
set shall apply throughout the WWEDF service area.
The WWEDF Board shall approve all investment policies involving unused funds. The Program Administrator shall be responsible
for the investment of unused funds per approved Board policies.
The WWEDF Board may set job creation and retention requirements on their Business Financing Programs that shall apply
throughout the WWEDF service area. Any job creation and retention requirements at a minimum shall adhere to applicable State
and/or Federal standards to the extent such standards apply to the WWEDF.
An independent auditor selected by the WWEDF Board shall audit the fund annually. Audit report findings shall be made available
to all RLF participants, electronic or otherwise.
The WWEDF Board shall have one representative from each County Loan Committee. Each County Loan Committee shall select
the person they want to represent their county on the WWEDF Board. The WWEDF Board shall consist of representatives from
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Western Wisconsin Economic Development Fund Administrative Manual
business lenders, businesses, local government and economic development organizations. A balance of these representatives on
the WWEDF is to be sought. The WWEDF Board must contain at least one person with private commercial lending experience,
and at least one attorney or accountant experienced in servicing businesses, at all times. When Board vacancies occur the County
Loan Committee must take into consideration the representational make-up of the WWEDF Board in choosing a replacement.
WWEDF Board terms shall be for three years. The initial terms shall be staggered on a one, two and three year term basis.
The WWEDF Board shall post review and act on all loans and loan amendments made by a county or community loan committee in
regard to the loans conforming to the policies of this Manual. The WWEDF Board shall review and act on all loan applications of
$200,000 or more, since loans of this size would represent a considerable percentage of the WWEDF’s available funds. The
WWEDF Board shall also approve all loan applications for special projects or loans which contain exceptions to the policies of this
Manual.
2.2 PROGRAM ADMINISTRATOR. The Program Administrator shall manage the loan portfolios on a day-to-day basis and take
actions to underwrite, recommend, close, and collect loans consistent with the lending policies and approvals of the loan
committees, the WWEDF Board, and the loan program. The Program Administrator shall maintain separate accounting records
and prepare reports on the use of program funds.
The Program administrator shall advise the County and Community Loan Committees and the WWEDF Loan Board on
delinquency and default matters.
The Program Administrator shall maintain contact with the County and Community Loan Committees on all business loan
requests. The County and Community Loan Committees are free to rely on a local RLF Administrator or utilize the Program
Administrator to conduct loan analysis and guide loan applications that come to their committees.
The Program Administrator shall subcontract for other services as needed and shall retain the services of outside legal counsel as
directed by the WWEDF Board.
2.3 WISCONSIN ECONOMIC DEVELOPMENT CORPORATION (WEDC) WEDC shall provide oversight and technical assistance
to the WWEDF. WEDC shall award CDBG funds to participating RLF counties to loan to eligible businesses and the repayments
shall be directed to the WWEDF. WEDC must be notified of all RLF requests of $200,000 or more for consideration of new
economic development grants to local governments that will further capitalize the WWEDF.
2.4 COUNTY AND COMMUNITY LOAN COMMITTEES. Each participating county shall establish a County Loan Committee to
make decisions on loans as described in this manual. The CDBG RLF cities or villages of: Sparta, Tomah, Hillsboro, Osseo and
Kendall may also establish a Community Loan Committee to make decisions on loans in their communities or they may delegate
loan decisions to the County Loan Committee. If they decide to delegate the loan decision to the County Loan Committee the
County Loan Committee shall admit one extra member from that city or village to have a vote on the loan decision for that
applicant in their community. The County or Community Loan Committee shall consist of at least 5 representatives from business
lenders, businesses, local government and economic development organizations. The County or Community Loan Committee
must contain at least one person with private commercial lending experience, and at least one attorney or account ant experienced
in servicing businesses at all times. A balance of these representatives on the County or Community Loan Committees shall be
sought. When Board vacancies occur the County or Community Loan Committees are to take into consideration the
representational make-up of their committee in choosing a replacement.
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Western Wisconsin Economic Development Fund Administrative Manual
The County or Community Loan Committee may authorize formation of sub-committees under it to make recommendations on
loans in the County or Community.
The County or Community Loan Committees shall market the WWEDF, assist local businesses with applications and communicate
with the Program Administrator and/or their local RLF administrator about economic development projects and priorities in their
communities.
County or Community Loan Committees in coordination with the Program Administrator, County Loan Administrator or Community
Loan Administrator shall schedule loan meetings to review loans.
County and Community Loan Committees shall make decisions on the following four programs when requests are below $200,000:
Conventional Loan, Microloans, Downtown Façade/Historic Loan, Retention & Efficiency Loan and Innovation Fund.
The County or Community Loan Committees shall review, select and approve loan applications based on the lending criteria and
authority defined in this Manual. When a loan application concerns an applicant within a city or village that contributed its CDBGfunded RLF to the formation of the WWEDF, and the city or village decides to delegate loan decisions to the County Loan
Committee, The County Loan Committee shall admit one extra member from that city or village to have a vote on the loan decision
for that applicant. The County or Community Loan Committees shall be responsible for the review and approval or denial of loan
applications. Loan Committees shall adhere to the requirements established by each loan program. A majority of the committee, as
defined by the WWEDF bylaws, must approve any action. No loan shall be made without the approval of the County or Community
Loan Committee. Within 60 days the County or Community Loan Committee shall make a decision on all loans or loan amendment
requests to terms and conditions after loans are closed. If a decision is not made within 60 days the final decision on the loan or
loan amendment shall be made by the WWEDF Board unless the WWEDF Board determines the decision should be made by the
County or Community Loan Committee. The 60 day period shall begin on the day the County or Community Loan Committee
receives all the required information to make a decision on the loan or loan amendment request unless the proposed borrower
requests a delay in consideration.
Subject to the procedures specified in Section 5.3.if a loan is delinquent or in default a County or Community Loan Committee if
they choose, shall have the authority to renegotiate with the business new terms and conditions if they conclude the business does
not have the ability to repay the loan as set forth in the original promissory note and/or loan agreement.
Notices and WWEDF Board and County and Community Committee meetings shall be held in accordance with open meeting
and records law. WWEDF Board and County and Community Committee meetings may be held by teleconference,
videoconference, or other interactive electronic means. Consent Resolutions may also be used to undertake WWEDF Board or
County or Community Committee business.
2.5 ADMINISTRATION FUNDING.
Funds may be withdrawn from the WWEDF to cover reasonable administrative expenses. Up to three percent of managed capital
may be used for administration. Managed capital is defined as the total cash on hand and all outstanding loan balances. Other
funds may be used in situations when funds are insufficient to cover administrative costs with prior approval of the WWEDF Board.
To generate additional revenue to cover administrative costs, the WWEDF Board may also establish loan origination fees, closing
fees, servicing fees, and other fees to cover charges directly related either to processing an application or to servicing a loan. Loan
fees shall be uniform throughout the WWEDF lending area.
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2.6 LOAN REVIEW MEETINGS. Pursuant to Section 19.84, Wisconsin Statutes, all County and Community Loan Committee
Members, and the WWEDF Board and the general public shall be given prior notice of each meeting. A majority of the
Committee or WWEDF Board in attendance at a meeting constituting a quorum shall be required for official committee or
WWEDF Board action. Actions must have the support of the majority of the total committee or WWEDF Board. Vacant positions
on the Committee shall be counted in determining the total number of committee or WWEDF Board members.
SECTION 3. GENERAL ELIGIBILITY CONSIDERATIONS
3.1 ELIGIBLE AREA. The area served by the WWEDF, programs shall include Buffalo, Crawford, Jackson, La Crosse, Monroe,
Pepin, Pierce, Trempealeau, and Vernon Counties in Wisconsin, if those Counties agree to participate. Businesses located in
HUD Entitlement Cities such as the City of La Crosse shall only be eligible for WWEDF loans that are classified as de-federalized
and shall also be subject to a population based threshold as described in Section 3.6
Businesses in cities and villages with Community Development Block Grant revolving loan funds that do not participate by
contributing its funds to the WWEDF and are within a county that does participate by contributing its funds to the WWEDF are not
eligible for WWEDF financing programs.
At the time of this Administrative Manual being prepared it had not been determined by WEDC if b usinesses in cities and villages
with Community Development Block Grant revolving loan funds that do participate by contributing its funds to the WWEDF and
are within a county that does not participate by not contributing its funds to the WWEDF whether businesses are eligible for
WWEDF financing programs in these villages and cities.
3.2 ELIGIBLE APPLICANTS. Applications may be submitted by the sole proprietor, managing partner or member, Chief
Executive Officer or majority owner of any business wishing to apply for a loan in eligible areas of the WWEDF service area.
Applicants shall submit a WWEDFapplication using the most current application available from the Program Administrator or the
County or Community local RLF Administrator if one has been designated.
Special project applications may also be submitted by the Chief Executive Officer of any local unit of government or community based organization located within the participating county areas. Applicants must demonstrate that the proposed project is viable
and that the business will have the economic ability to repay the funds and meet the requirements of the loan program being
applied for.
Applicants shall comply with all applicable local, state, and federal laws and codes.
Applicants shall not discriminate on the basis of age, race, religion, color, handicap, sex, physical condition, development
disability as defined in Wisconsin Statute 51.01(5), sexual orientation or national origin in any employment or construction activity
related to the use of the business loan funds.
Applicants must agree to remain physically located in the community in which the loan is originated during the term of the lo an.
To qualify for funding, eligible businesses must complete an application and submit all relevant supporting d ocumentation. Only
when all the necessary documentation has been submitted will the application be processed and presented to a loan committee
for formal action.
All Applicants must be current in all tax payments at all levels, including any fees to be a ssessed by the municipality, or be
current in an approved plan to pay taxes or fees.
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No member of the WWEDF, or any other official, employee, agent of the WWEDF, no member of the county or community loan
committees, or person, who exercises decision-making functions or responsibilities in connection with the implementation of this
program, is eligible for financial assistance under this program while serving in any decision making capacity with the WWEDF.
No WWEDF loans will be made that are in conflict with Section 946.13 of the Wisconsin Statutes (Private interest in Public
Contract Prohibited).
If an applicant for a WWEDF loan has been refused, the applicant is ineligible to apply for another WWEDF loan for a period of
12 months after the refusal is issued by the WWEDF Board or the County or Community Loan Committee. The WWEDF Board
or the county or community loan committee may grant an exception to this policy if they agree circumstances of the business
have changed significantly to warrant reconsideration within one year.
3.3 ELIGIBLE ACTIVITIES. The majority of loan funds shall primarily finance small or medium-sized business projects with
terms and conditions that give them a better chance to succeed and provide economic benefit to the region. Projects proposed
for funding must address one or more of the Objectives in Section 1.2. The Conventional, Micro, Downtown Façade/Historic,
Retention and Efficiency and Innovation loan programs may have additional restrictions on eligible activities, but the following is a
list of all activities that will be eligible in one or more of the loan programs when federal restrictions are lifted.
1) Acquisition of land, buildings and fixed equipment
2) Site preparation and construction & reconstruction for non-speculative projects
3) Installation of fixed equipment
4) Clearance, demolition, removal, rehabilitation or construction of buildings and improvements
5) Payment of assessments for sewer, water, street, and other public utilities if the provision of the facilities help business
expand
6) Working Capital which finances short-term operating expenses. Working capital will include training expenses and some
relocation expenses.
7) Downtown façade, historic reinvestment and streetscape improvements
8) Micro-financing
9) Short-term interim financing
10) Patient debt and equity investments
11) Capital investments for dairy producers that will result in significant long-term increase in capacity to produce milk
3.4 INELIGIBLE ACTIVITIES.
1) Refinancing or consolidation of existing debt
2) Reimbursement for expenditures prior to loan approval
3) Specialized equipment that is not essential to the business operation
4) Residential building construction or reconstruction (unless such reconstruction is intended to convert the building to a
business or industrial operation)
5) Non-business expenses
6) Routine maintenance
7) Relocation of a business from one community within the region to another community within the region, without extenuating
circumstances (e.g., if the business is threatened with closure and/or massive job loss if it stays in its current location) and a
written statement assenting to the relocation from the County Board, City Council, Village Board, or Town Board of the
community the borrower is leaving.
8) Compensation for a fundamental business weakness or a poor credit history
9) Other activities the WWEDF Board and County Loan Committees may identify during the administration of the program.
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3.5 INELIGIBLE BUSINESSES
1) Gambling activities including any business whose principal activity is gambling
2) Adult Bookstores or adult/companion escort or entertainment services
3) Nightclubs and bars without food services, except for façade loans
4) Lending institutions
5) Rent-to-own businesses
6) Businesses not serving the interests of Western Wisconsin
7) Real estate investment speculation.
3.6 WWEDF BOARD AND COUNTY AND COMMUNITY LOAN BOARD LOAN DECISION MAKING POLICIES.
WWEDF management decisions are to be based on a policy that the WWEDF is to provide opportunities for all counties and
communities in the region to benefit from its programs.
WWEDF management decisions are to be guided by a policy that lending shall occur to all qualified businesses throughout the
region that apply to its programs.
The WWEDF Board and the local RLF boards shall work cooperatively in a collaborative manner to maximize the regional
economic development benefits of these funds.
The WWEDF Board and the local RLF boards shall work cooperatively in a collaborative manner to facilitate spreading the RLF
loans equitably throughout the region.
To help equitably spread WWEDF lending throughout the region to the extent practical and aid in capital protection the following
thresholds are set. When these thresholds are met the lending decisions on future loans will be made by the WWEDF Board.
1. On any loan application of $200,000 or more.
2. When federalized lending activity in a county exceeds the greater of:(1) 120% of its total RLF cash contribution, or (2) its
percentage of the regional 2010 population applied against the total regional RLF cash contribution. All Counties shall be
provided a base of at least $200,000 if this calculation results in a threshold for a county of less than $200,000. This threshold
shall be in place for four years.
3. When de-federalized lending or investment activity in one county exceeds the greater of: (1) 120% of the funds that are owed
to the local RLF on the date it contributes its RLF funds to the WWEDF or (2) its percentage of the regional 2010 population
applied against all the funds that are owed to the regional RLF. All Counties shall be provided a base of at least $400,000 if
this calculation results in a threshold for a county of less than $400,000. This threshold shall be in place for five years.
4. When lending or investment activity in a designated Entitlement Community (such as the City of La Crosse) exceeds its
percentage of its county’s 2010 population applied against its threshold as calculated in 3. above. This threshold shall be in
place for two years.
If the county’s total outstanding lending principal is below the above threshold amounts, but the new loan in question
would push it over the threshold amount, then that loan application will be decided by the WWEDF Loan Board.
A county and cities or villages within that county that contributed their Community Development Block Grant Revolving Loan Funds
to the WWEDF may set their own county thresholds if the county, cities and villages agree to the thresholds, the threshold
allotment is equitable throughout the county and the sum of the thresholds allotted does not conflict with or exceed the total
thresholds stated in 1., 2., and 3.above for the county.
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Western Wisconsin Economic Development Fund Administrative Manual
The WWEDF Board may continue, amend or cancel these thresholds after the four or five year periods.
To assist in accounting for the above thresholds, two funds shall be accounted for separately. One pool shall consist of the
federalized RLF cash contributions from the RLF counties, cities and villages. This pool of funds will be made available
immediately with lending from the Conventional Loan program described below. The second pool shall consist of de-federalized
funds received from existing and future loan repayments. This pool of funds will begin lending after one year or whenever this pool
of funds exceeds $500,000, whichever occurs first. Lending from all the loan programs described below can be used by this poo l
of funds. Pool one will eventually be depleted through lending and its repayments will become part of pool two.
The WWEDF board may set a date and/ or amount on when a business may access de-federalized funds if the county they are in
joins the WWEDF late. The reason for this is a late joining county would not have contributed any funds to the existing pool of defederalized funds. An exception to this is a late joining county’s businesses would be immediately eligible for the de-federalized
funds generated from loans the county transferred to the WWEDF.
SECTION 4. BUSINESS FINANCING PROGRAMS The following describes the purpose and intent of the Western Wisconsin
Economic Development Fund Financing Programs available to businesses.
4.1 CONVENTIONAL LOAN
Purpose: The purpose of the Conventional Loan is to provide financing to a business that fills a financing gap that private or other
sources of funding cannot meet. Its intent is to participate with and stimulate equity investment and lending from others through its
more lenient lending terms and conditions. The Conventional Loan shall not be the major source of financing for a business. The
Conventional Loan participates in loans with other lenders. It will not issue guarantees, letters of credit or other contingent
financing arrangements. Conventional Loans that are not yet de-federalized shall meet federal requirements of the HUD-CDBG
Small Cities Program. Original cash contributions from participating RLF counties, cities and villages are still designated
as federalized funds and must be loaned from the Conventional Loan Program only. When a Conventional Loan is
made the repayments to the WWEDF become de-federalized. This accumulating de-federalized pool of funds can be
used for funding the other loan programs described below. It is therefore important to loan out the federalized cash
contributions from counties and communities expeditiously to grow the de-federalized pool of funds.
Eligibility: The Conventional Loan shall address all requests not addressed by other WWEDF loans. Applicants may apply for the
Conventional Loan if no funds are available in the Microloan program, but may not apply for both a Microloan and a Conventional
Loan at the same time. Businesses that have received microloans and have a satisfactory repayment history can apply for
Conventional Loan funding for expansion projects.
Use of Funds: Real Estate Acquisition and/or Construction, Working Capital and Equipment
Equity Requirement: The WWEDF encourages as much equity participation from a business as practical. A specific equity amount
is not set due to the unique circumstances of each business. Based on financial disclosure during the loan review process, the
quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may adjust the amount of
equity investment required from the business in order for a business to secure a WWEDF loan.
Loan Participation Not to Exceed 50%: The WWEDF Board and the County and Community Loan Committees shall require the
business to seek as much participatory funding from other public and private sector sources on projects as practical. The
Conventional Loan program will not participate in a project if it exceeds 50% of the total project. Based on financial disclosure
during the loan review process, the quality of the loan application and business’s prospects; local loan committees or the WWEDF
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Western Wisconsin Economic Development Fund Administrative Manual
Board may require the business to acquire additional funding from other sources in order to secure a Conventional Loan.
Interest Rate: The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The
interest rates set shall apply throughout the WWEDF service area.
Guarantees: Personal guarantees are required from any person with a 20% or greater ownership interest in the business.
Corporate guarantees are required if applicable.
Collateral: The WWEDF Board and local loan committees shall seek to achieve as favorable collateral position as practical to
secure a loan. Collateral needed for a given loan will be based on the assets available from the business and business owner(s).
Mortgages and liens on both the business and on personal assets will be considered as eligible collateral on all loans.
Cost Per Job: Businesses that borrow federalized funds are to create at a minimum 1 full time permanent or equivalent position for
every $ 20,000 borrowed from the WWEDF. See Section 5 for more details on job creation and retention requirements.
Terms and Conditions: The Process and Procedures policies in Section 5 explains the loan application process, economic
development benefit expectations, loan documentation requirements, late payment policies, and record keeping requirements
pertaining to all WWEDF loan programs. Table 4.1 provides a comparative perspective on this loan program compared to the other
loan programs offered by the WWEDF.
4.2 MICRO LOAN
Purpose: The Micro Loan is designed to provide small loans to start-up, newly established, or growing small businesses. A key
objective of the program is to assist business owners who have traditionally had difficulty accessing debt financing. The Micro
Loan is established with the expressed intent of encouraging and supporting entrepreneurship in the WWEDF service area of
Western Wisconsin.
Eligibility: Each applicant is expected to have good character, strong commitment to their business idea, signs of feasibility and
economic viability, and a credit history to suggest a reasonable assurance that the loan will be repaid.
Use of Funds: Real Estate Acquisition and/or Construction, Working Capital and Equipment
Equity Requirement: The WWEDF encourages as much equity participation from as business as practical. A specific equity
amount is not set due to the unique circumstances of each business. Based on financial disclosure during the loan review proc ess,
the quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may adjust the amount of
equity investment required from the business in order for a business to secure a WWEDF loan.
Loan Participation Amount: The WWEDF Board and local loan committees shall require the business to seek as much
participatory funding from other public and private sector sources on projects as practical. The Micro Loan Program will provide up
to 100% financing but the business must provide evidence of its inability to obtain financing from other sources to receive 100%
Micro Loan funding. In addition, based on financial disclosure during the loan review process, the quality of the loan application
and business’s prospects; local loan committees or the WWEDF Board may require the business to acquire additional funding
from other sources in order to secure a Micro Loan.
Interest Rate: The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The
interest rates set shall apply throughout the WWEDF service area.
Guarantees: Personal guarantees are required from any person with a 20% or greater ownership interest in the business.
Corporate guarantees are required if applicable.
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Western Wisconsin Economic Development Fund Administrative Manual
Collateral: The WWEDF Board and local loan committees shall seek to achieve as favorable collateral position as practical to
secure a loan. Collateral needed for a given loan will be based on the assets available from the business and business owner( s).
Mortgages and liens on both the business and on personal assets will be considered as eligible collateral on all loans.
Terms and Conditions: The Process and Procedures policies in Section 5 explains the loan application process, economic
development benefit expectations, loan documentation requirements, late payment policies, and record keeping requirements
pertaining to all WWEDF loan programs. Table 4.1 provides a comparative perspective on this loan program compared to the othe r
loan programs offered by the WWEDF.
4.3 FACADE/HISTORIC LOAN PROGRAM
Purpose: This loan program is established to grow businesses in existing downtowns or areas where there is a concentration of
business buildings by providing loans to improve their visual appearance and usability. This loan fund is set up to help
businesses become more attractive and revive areas where businesses are concentrated by creating joint marketing
opportunities to increase their customer base. Targeted properties are commercial buildings that are older or have historic in
significance.
Eligibility. Property owners or businesses located in a commercial building or a group of commercial bu ildings in established
downtowns or where businesses are concentrated, most of which are older or historic are eligible for this program. Startup
businesses are eligible but must provide an acceptable business plan and show sufficient management background . Business
applicants must demonstrate ability to cash flow the project and operate a business successfully. Property taxes shall be current
or are current based on a payment schedule approved by the local government.
Eligible Uses. Eligible loan activities include façade renovation, signs, exterior doors, windows/ awnings, exterior graphics,
exterior lighting, and other façade or landscape improvements that meet established design guidelines. Bringing a building into
compliance with the Americans with Disabilities Act is eligible for funding. Building code violations such as roofing, structural
repair, and necessary mechanical systems upgrades are eligible, but only as part of an approved façade improvement.
Remodeling a building to make it more accommodating for business use is eligible but must be in conjunction with an approved
façade project. Façade/Historic Loans can only be used for rehabilitation expenses incurred after the application is approved for
funding. Façade/Historic Loan applications can be considered at the same time as an Conventional or Microloan application,
though the Façade/Historic Reinvestment Loan and the Conventional or Microloan applications may only be approved
conditionally (i.e., one application is approved on the condition that the other is also approved).
Ineligible Uses. Loans shall not be used for refinancing, building purchases, inventory, furniture, equipment or working capital.
Projects cannot be primarily residential in nature. Projects must have reasonable assurance of repayment.
Equity Requirement: The WWEDF encourages as much equity participation from as business as practical. A specific equity
amount is not set due to the unique circumstances of each business. Based on financial disclosure during the loan review proc ess,
the quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may adjust the amount of
equity investment required from the business in order for a business to secure a WWEDF loan.
Loan Participation Amount: The WWEDF Board and local loan committees shall require the business to seek as much
participatory funding from other public and private sector sources on projects as practical. The Facade/Historic Loan Program will
provide up to 100% financing but the business must provide evidence of its inability to obtain financing from other sources to
receive 100% Façade/Historic Loan financing. In addition, based on financial disclosure during the loan review process , the quality
of the loan application and business’s prospects; local loan committees or the WWEDF Board may require the business to acquire
additional funding from other sources in order to secure a Façade/Historic Loan.
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Interest Rate: The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The
interest rates set shall apply throughout the WWEDF service area.
Design Requirements. Applicants must provide acceptable façade design plans that comply with approved general design
guidelines such as the National Historic Trust's "Keeping Up Appearances" or suitable design guidelines prepared and adopted
by local governments.
Guarantees: Personal guarantees are required from any person with a 20% or greater ownership interest in the business.
Corporate guarantees are required if applicable.
Collateral: The WWEDF Board and local loan committees shall seek to achieve as favorable collateral position as practical to
secure a loan. Collateral needed for a given loan will be based on the assets available from the business and business owner(s).
Mortgages and liens on both the business and on personal assets will be considered as eligible collateral on all loans.
Terms and Conditions: The Process and Procedures policies in Section 5 explains the loan application process, economic
development benefit expectations, loan documentation requirements, late payment policies, and record keeping requirements
pertaining to all WWEDF loan programs. Table 4.1 provides a comparative perspective on this loan program compared to the other
loan programs offered by the WWEDF.
4.4 RETENTION AND EFFICIENCY LOAN
Purpose: The loan is designed to retain and grow exiting business and industry. It is available to help businesses become more
efficient and competitive, and create greater economic benefits in their community. This loan shall provide gap financing to fill gaps
to stimulate private sector lending and investments in a business. This loan shall not be the primary source of
financing for projects and will work in partnership with lending institutions and investors. This loan will provide direct
loans. It will not issue guarantees, letters of credit or other contingent financing arrangements.
Eligible Uses: Working Capital for research and development, training, inventory, technology acquisition, and/or fixed
assets and real estate.
Equity Requirement: The WWEDF encourages as much equity participation from as business as practical. A specific equity
amount is not set due to the unique circumstances of each business. Based on financial disclosure during the loan review proc ess,
the quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may adjust the amount of
equity investment required from the business in order for a business to secure a WWEDF loan.
Loan Participation Not to Exceed 50%: The WWEDF Board and local loan committees shall require the business to seek as much
participatory funding from other public and private sector sources on projects as practical. The Retention and Efficiency Loa n
program will not participate in a project if it exceeds 50% of the total project. Based on financial disclosure during the loan review
process, the quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may require the
business to acquire additional funding from other sources in order to secure a Retention and Efficiency Loan.
Interest Rate: The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The
interest rates set shall apply throughout the WWEDF service area.
Guarantees: Personal guarantees are required from any person with a 20% or greater ownership interest in the business.
Corporate guarantees are required if applicable.
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Western Wisconsin Economic Development Fund Administrative Manual
Collateral: The WWEDF Board and local loan committees shall seek to achieve as favorable collateral position as practical to
secure a loan. Collateral needed for a given loan will be based on the assets available from the business and business owner( s).
Mortgages and liens on both the business and on personal assets will be considered as eligible collateral on all loans.
Terms and Conditions: The Process and Procedures policies in Section 5 explains the loan application process, economic
development benefit expectations, loan documentation requirements, late payment policies, and record keeping requirements
pertaining to all WWEDF loan programs. Table 4.1 provides a comparative perspective on this loan program compared to the othe r
loan programs offered by the WWEDF.
4.5 INNOVATION FUND
Purpose: The Innovation Fund is designed to provide one or more business financing alternatives including traditional loans,
“patient debt” lending or equity financing to innovation companies that have the potential to create positive economic benefits in
their communities. The Innovation Fund is intended to be complementary to equity sources of capital for businesses that may not
possess the transaction size of market potential to attract angel or venture capital and/or conventional financing.
Eligible Applicants: A business must locate their business in the WWEDF service area. The business must be a technologyspecific company possessing and/or developing a proprietary product, service or other intellectual property. The business must
have a strong market outlook, solid prospects for full-scale commercialization, and a likely-hood to attract follow-on funding.
Equity Requirement: The WWEDF encourages as much equity participation from as business as practical. A specific equity
amount is not set due to the unique circumstances of each business. Based on financial disclosure during the loan review proc ess,
the quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may adjust the amount of
equity investment required from the business in order for a business to secure WWEDF financing.
Loan or Investment Participation Not to Exceed 50%: The WWEDF Board and local loan committees shall require the business to
seek as much participatory funding from other private and public sources as practical. The Innovation Fund program will not
participate in a project if it exceeds 50% of the total project. Based on financial disclosure during the loan review process, the
quality of the loan application and business’s prospects; local loan committees or the WWEDF Board may require the business to
acquire additional funding from other sources in order to secure financing from the Innovation Fund.
Interest Rate: The WWEDF Board shall set loan interest rates at least annually based on points plus or minus the prime rate. The
interest rates set shall apply throughout the WWEDF service area.
Loan or Investment Size: $25,000 - $250,000 for working capital. Interest at prime plus 2%-8%.
Loan Repayment: Repayment on the Innovation Fund loan or equity investment shall occur within 5 years. Deferral and interestonly period may correspond to project ramp-up to stabilized break-even operations – not to exceed 18 months.
Guarantees: Personal guarantees are required from any person with a 20% or greater ownership interest in the business.
Corporate guarantees are required if applicable.
Collateral: The WWEDF Board and local loan committees shall seek to achieve as favorable collateral position as practical to
secure a loan or equity investment. Collateral required will usually be in the form of a security interest in all of the business’s
assets, including the technology associated with or developed during the time of the investment. In cases where another part y
owns the technology, the company must have a proper licensing agreement in place. WWEDF subordination to senior asset-based
lenders is allowed. The WWEDF may also take warrants or certain conversion rights for a percentage of its loan face value to
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Western Wisconsin Economic Development Fund Administrative Manual
compensate for the risk. Royalties or other success fees may also be included to provide appropriate levels of return to the
WWEDF for its risk. Collateral needed for a given loan will be based on the assets available from the business and business
owner(s). Mortgages and liens on both the business and on personal assets will be considered as eligible collateral on all loans or
equity investments made through the Innovation Fund.
Terms and Conditions: The Process and Procedures policies in Section 5 explains the loan application process, economic
development benefit expectations, loan documentation requirements, late payment policies, and record keeping requirements
pertaining to all WWEDF loan programs. Table 4.1 provides a comparative perspective on this loan program compared to the othe r
loan programs offered by the WWEDF.
Portion of the WWEDF Portfolio: The WWEDF Board shall set limits on percent of the WWEDF portfolio that can be
invested in the Innovation Fund.
Administrative Costs: Due to the diverse nature and complexity of financing the Innovation Fund may become
involved in, The WWEDF may charge additional fees to cover additional costs associated with this Fund.
Application Procedure: Applicant contacts the Program Administrator or local RLF Administrator to discuss the proposal and
to establish potential eligibility. Applicant completes application and all documentation and submits it to the Program
Administrator or local RLF Administrator. For amounts less than or equal to $200,000, the County Loan Committee
will consider the application and make a decision; the WWEDF Board will consider and make decisions on
applications for amounts greater than $200,000.
4.6: LOAN PAYMENTS: Loan payment terms may include longer amortization schedules with balloon payments.
Loan payments are to be made monthly based on a monthly amortization schedule. Payment of interest and/or
principal may be deferred during the implementation period of the assisted activity if merited in the loan application
and approved by the County or Community Loan Committee if they approved the loan or the WWEDF Board loan if
they approved the loan. Interest shall accrue during the deferment period and maybe paid in full or added to the
principal amount of the loan. Following the deferral period, interest and principal shall be paid for the remaining term
of the loan. There will be no loan prepayment penalties.
4.7: WWEDF FINANCING PROGRAM COMPARISON TABLE
The Table 4.1 on the following page provides a comparative general summary of the five loan funds available.
16
Table 4.1 Western Wisconsin Economic Development Fund Loan Program General Summary
Name of Loan Programs and Purpose
17
Conventional Loan - Serves as gap
financing to help attract and secure bank or
other project financing. Original cash
contributions from participating RLF counties
and communities are federalized funds and
must be loaned from this loan program.
Micro Loan – Assist start–up and existing
small businesses that have difficulty
accessing traditional bank financing. Must
demonstrate inability of bank participation to
receive 100% Micro Loan funding.
Downtown Façade - Historic Loan Improve business conditions and
appearance of downtowns or areas where
older or historic business buildings are
concentrated. Must demonstrate inability of
bank participation to receive 100% financing
from this loan. Business can apply for other
RLF funding once façade improvement
finished.
Retention and Efficiency Loan - Help
improve competitiveness of existing
businesses through efficiency initiatives
involving training, research and
development, equipment, inventory,
supplies, technology, real estate, or other
assets to better position themselves for long
term success.
Uses
Real Estate, Working
Capital, Equipment
Real Estate, Working
Capital, Equipment
Facade renovation, signs,
doors, windows, lighting,
landscaping, roofing,
structural repair,
mechanical items in
conjunction with façade
improvements. Targeted to
areas where older or
historic buildings are at.
To help retain existing
businesses and jobs
through provision of
working capital for training,
R&D, supplies and
inventory. Or for
equipment, technology
other fixed assets or real
estate
Innovation Fund - Must be technology or Patient debt and/or equity
high knowledge business possessing and/or financing for emerging
developing a proprietary product, service or innovation companies for
intellectual property with strong market
working capital. Funding
outlook, and likelihood to attract follow-up
could be a loan, equity
funding.
position or combination of
the two.
Lending Amount
Limits
$25,000 –
$250,000
Interest Rates
Loan Terms
Prime rate
plus or
minus 2 percentage
points
Real Estate: up to 12 years with up
to 20 year amortization
Equipment: up to 10 years
Working Capital: up to 7 years
Up to $25,000
Prime rate
plus or
minus 2 percentage
points
1 job per $20K of federalized loan
Real Estate: up to 12 years with up
to 20 year amortization
Equipment: up to 10 years
Working Capital: up to 7 years
Up to $30,000
0% to Prime plus 2
percentage points
Up to
$250,000
$25,000 - $250,000
Security
PG
CG
Mortgage
Lien
GBSA
RLF Participation
Percent
Not to exceed 50%
PG,
CG
Lien
Mortgage,
GBSA
Real Estate: up to 12 years with up PG
to 20 year amortization
CG
Lien
Equipment: up to 10 years
Mortgage
GBSA
Up to 100%
Prime rate
plus or
minus 2 percentage
points
Real Estate: up to 12 years with up PG
to 20 year amortization
CG
Lien
Equipment: up to 10 years
Mortgage
GBSA
Working Capital: up to 7 yrs.
Not to exceed 50%
Prime rate plus 2 to 8
percentage points.
Warrants or conversion
rights on a percentage
of loan may be taken.
Working capital with payback
expected within 5 years.
Not to exceed 50%,
the other 50%
should come from
other equity
investors
PG
CG
Mortgage
Lien
GBSA
Stock
Ownership
Up to 100%
WWEDF financing terms and conditions will be tailored to each businesses’ need based on business plan and financial disclosure review.
Western Wisconsin Economic Development Fund Administrative Manual
5.0 PROCESS AND PROCEDURES
Upon approval of this Administrative Manual by the participating counties, cities and villages, WWEDF Board and the WEDC, A
Business Loan Form will be prepared that will be used throughout its service area. This application will adhere to the standards of
this Manual and all applicable federal or state requirements.
5.1 LOAN APPLICATION PROCESS: The business should contact the Program Administrator or the local RLF administrator if a
county or community has designated one about funding availability and eligibility. Local RLF administrators shall regularly
communicate with the Program Administrator to keep informed about funding levels to ensure a business does not complete an
application if no funds are going to be available in the amount and time needed by the business. Loan applications shall be
completed and submitted to the Program Administrator or the local RLF administrator if a county or community has designated
one. Once the Local RLF Administrator determines that an application is complete, the business and the Program Administrator
shall be notified. Table 5.1 illustrates how responsibilities are assigned and decisions made by the WWEDF.
RLF Loan Review/Approval: The Program Administrator or the local RLF administrator if a county or community has designated
one shall review the application and supporting documents required to underwrite the loan and verify that the loan request meets
program criteria and follows prescribed standards. The Program Administrator or the local RLF administrator if a county or
community has designated one shall schedule a loan committee meeting depending on type and amount of loan request. The
applicant shall be notified as to the date and time of the loan meeting. The applicant is required to attend the loan review meeting
and any participating lender is also encouraged to attend. The Program Administrator or the local RLF administrator if a county or
community has designated one shall send the complete application with all attachments and documentation to the Program
Administrator.
The RLF loan committee shall conduct basic financial underwriting prior to approving loans that include:
1) The recipient can repay the proposed assistance.
2) Project costs are reasonable.
3) All sources of project financing are committed.
4) Prescribed capital is available to be invested.
5) The project is financially feasible.
6) To the extent practicable, the return on the owner's equity investment will not be unreasonably high
7) Proposed funding does not enable a business to compete unfairly with existing businesses in the community offering similar
goods or services.
8) The loan application meets the requirements of the loan program standards.
9) For Facade/ Historic Loan applications copies of the description, design plans, sketches, and photographs are to be
obtained.
Economic Development Benefits of Loans: The RLF Loan Committees and the WWEDF Board shall also take into consideration
economic development benefits of all loan applications. There are both direct and indirect benefits that can be considered by the
loan committees. The committees shall evaluate proposed loans weighing the economic impacts such as:
Direct Benefits
1) Job creation and retention, especially jobs that pay good wages and provide benefits.
2) Increased tax base and amount of private investment leveraged.
3) Creation or retention of services needed or not available in a community
Examples - Indirect Benefits
1) Spin-off effects that strengthen other sectors of the economy.
2) Creation of a visible symbol of positive economic change in a community or the region.
3) Long-term economic and employment innovation potential.
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Western Wisconsin Economic Development Fund Administrative Manual
4)
5)
6)
7)
Adds value to and expands the market for area resources.
Diversifies the local economy.
Invests in new technology.
Helps reverse brain-drain.
Job Creation: For businesses borrowing federalized funds at least one (1) full time permanent or equivalent position shall be
created for every $20,000 borrowed from the WWEDF. The WWEDF Board may set lower job cost standards that would take into
consideration type of jobs, hourly wages, etc. The WWEDF Board may also set different job creation or retention standards for defederalized funds.
The Program Administrator or the local RLF administrator if a county or community has designated one shall issue commitment
letters for approved loans only after the loan is approved by the Loan Committee. If the commitment is accepted by the busine ss,
the Program Administrator shall close, disburse and service the loan. In the case where the County or community has designated
a local RLF administrator the local RLF administrator shall contact the Program Administrator to close, disburse and service the
loan.
RLF Loan Review/Denial: If the loan committee denies a loan application the Program Administrator or the local RLF administrator
if a county or community has designated one shall issue a denial letter to the business stating reasons for denial. If the a local RLF
administrator is issuing this letter a copy shall also be sent to the Program Administrator.
5.2 LOAN DOCUMENTATION
Prior to releasing funds, the following documentation must be in place or provided at the appropriate time during the
term of the loan.
1) Compliance with Applicable Laws. Certification is to be obtained from the business that they are in compliance
with and will stay in compliance with all applicable local, state, and federal laws or codes or they have an
approved agreement in place with the County or Community Loan Board or the WWEDF Board to remedy any
non-compliance issues.
2) Project Completion Schedule. Businesses that borrow federalized funds are to provide a Project
Implementation Schedule not exceeding 24 months for project completion and job creation and maintain the
positions created for 24 months. The WWEDF board may establish other Project Implementation Schedule
period for de-federalized funds.
3) Notice of Loan Commitment and Acceptance. The designated Loan Committee must have reviewed and
approved a complete application for an applicant to be eligible for funding. The Program Administrator or the
local RLF administrator if a county or community has designated one shall draft the letter of commitment based on the
conditions approved by the WWEDF Board or the county or community loan committee. In the case where the
County or community has designated a local RLF administrator the local RLF administrator shall provide a copy of the
loan commitment letter to the Program Administrator. The business applicant must return an executed
acceptance of loan terms to the Program Administrator to initiate loan closing.
4) Evidence of permits, etc. Documentation must be provided by the applicant that all necessary permits, licenses
and any other registrations have been obtained prior to the release of loan funds.
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Western Wisconsin Economic Development Fund Administrative Manual
5) Loan Agreement. The Program Administrator shall prepare a loan agreement that shall be executed by the
authorized persons of the WWEDF Board and the business who have authority to commit the WWEDF Board
and business to the Loan Agreement.
6) Promissory Note. A promissory note shall be prepared by the Program Administrator and must be dated and
specify the amount and terms of the WWEDF loan.
7) Security. Mortgage, lien instruments and guarantees shall be considered and provided as necessary for all
loans. The documents will be executed at the time of the loan closing. The Program Administrator shall
promptly record the documents. The documents will be placed in loan files and may include:
a) Mortgage and security agreement
b) UCC searches and filing
c) Guarantee agreement
d) Title insurance or abstract, if applicable
e) Assignment of life insurance, if applicable
f) Casualty insurance binder
g) Personal and/or other guarantee
h) Other documentation as may be appropriate
8) Repayment Schedule. The Program Administrator shall prepare or review an amortization schedule.
9) Evidence of Program Expenditures. Documentation acceptable to the Program Administrator must be provided by the
business to evidence program expenditures.
10) Other Documentation. As appropriate or necessary, the loan recipient may be asked to provide the following to the Program
Administrator:
a)
b)
c)
d)
e)
The Articles of Incorporation and by-laws or Articles of Organization and operating agreements
A resolution or agreement to borrow funds
Evidence of having secured other funds necessary for the project
Current financial statements
An Environmental Assessment for real estate loans. The assessment may be a Phase I, II, or III analysis, depending
on the environmental condition of the site.
With the applicable above documentation in place, the Program Administrator will schedule a loan closing. All documents shall be
executed before funds are disbursed, and mortgages and UCC statements shall be recorded with the Register of Deeds and the
Wisconsin Department of Financial Institutions.
5.3 DELINQUENCY AND DEFAULT PROCEDURES.
A loan shall be defined as critically late when payments are late up to and including ten days. A loan shall also be defined as
delinquent if a payment is past-due by any length of time up to and including 60 days. A loan shall be defined as in default if it is
past-due by any length of time beyond 60 days. The Program Administrator shall contact the borrower when its loan becomes
critically late to determine the practicality of the business making the loan current before it reaches default. If the critically late
payment status cannot be satisfied the Program Administrator shall provide written notice no later than 30 day of past-due
payments to: the business, the County or Community Loan Committee that approved the loan or the WWEDF Board if they
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approved the loan. Each County and Community Loan Committee and the WWEDF Board shall designate a person who shall
serve as their liaison that the Program Administrator is to contact regarding loan delinquency. The written notice to the business
shall specify the following:
1) The action required to cure the delinquency.
2) A date from the notice, by which the delinquency must be cured to avoid default status.
3) Any penalties incurred as a result of the delinquency.
4) If the business would like to meet with the County or Community Loan Committee that approved the loan or the WWEDF
Board if they approved the loan to develop a plan to avoid default.
If a County or Community Loan Committee approved the loan that becomes delinquent or in default it shall have the authority if it
chooses to renegotiate with the business new loan terms and conditions. A County or Community Loan Committee that approved
a loan may also renegotiate with the business new loan terms and conditions if the borrower has or is likely to default or violate
other agreements, laws and regulations that could threaten payment of the WWEDF loan. To renegotiate the new terms and
conditions the County or Community Loan Committee must conclude the business does not have or will not have the ability to
repay the loan as set forth in the promissory note and/or loan agreement. The County or Community Loan Committee shall have
the authority to allow deferral of loan interest and principal payments by the business up to 120 days starting on the first day of
payment delinquency by the business to negotiate an agreeable repayment plan for the business.
Any finalized repayment plans approved by the County or Community Loan Committee for a business that offer deferral of
principal and/or interest payments for the business beyond 180 days starting on the first day of payment delinquency shall require
the approval of the WWEDF Board. The County or Community Loan Committee that approved a loan may defer new loan terms
and condition decisions to the WWEDF Board. On all new loan terms and conditions interest shall accrue during the deferment
period and may be paid in full or added to the principal amount of the loan. Following the deferral period, interest and principal
shall be paid for during the remaining term of the loan. All terms and conditions negotiated shall comply with the terms and
conditions of this Administrative Manual, and any state and federal requirements that govern the business loan.
If the business defaults on any of the terms and conditions of the loan agreement, note, participation agreement, mortgage,
security agreement, or other agreement issued in connection with a loan, and it is determined by the County or Community Loan
Committee if they approved the loan or the WWEDF Board if they approved the loan, that negotiation with the business on new
terms and conditions as described above are not practical, the WWEDF Board may then commence action to recover the unpaid
balance of the note and account, and may empower the Program Administrator to take action to protect the WWEDF’s interests.
The County or Community Loan Committee that approved a loan may defer all loan collection and recovery decisions after defaul t
to the WWEDF Board.
The WWEDF Board shall have the sole authority to approve all legal actions and costs pertaining to collection actions regarding
default, business or collateral foreclosure, repossession, deficiency judgments, bankruptcy and any other litigation costs.
5.4 USE OF LOAN REPAYMENTS AND REPORTING.
Repaid loans shall be re-deposited into the WWEDF account and used in a manner consistent with this Administrative Manual and
agreements with the Wisconsin Economic Development Corporation. A separate accounting record for each loan shall be kept to
account for all loans. The fund account shall be audited yearly by an independent auditor. The Program Administrator shall
prepare reports on the use of funds.
5.5 LOAN SERVICING
The Program Administrator shall be responsible for the day-to-day administration of the portfolio, including establishment and
maintenance of recordkeeping and tickler file systems, preparing and submitting progress reports, collecting and analyzing
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financial statements, conducting field visits, monitoring repayments and working with problem loans. The Program Administrator
subject to WWEDF board approval may engage outside staff to assist with the administration of the fund including accountants
and legal counsel. The Program Administrator shall monitor each loan to ensure compliance with the loan terms and conditions
and to monitor the financial health of the business. The monitoring will also ensure that all recordkeeping requirements are met.
A loan servicing file shall be established and maintained for each loan. The file shall include all written correspondence: a record
of important telephone conversations; a list of applicable loan covenants; certificates of insurance for - builder's risk, propertycasualty, and life insurance, as applicable.
Loans shall normally have loan payments due every month.
The objective of the WWEDF is to contribute a positive economic benefit rather than maximizing return on investment. Thus the
WWEDF Board has more latitude in dealing with a problem loan than a traditional lender does. If the business cou ld benefit from
a loan workout and other participating lenders are also willing to work with the business, the WWEDF Board may utilize various
alternatives to assist the troubled business with an amended payment structure.
Collection actions including collateral foreclosure, repossession and legal actions taken to preserve the WWEDF's interest in
collateral shall be taken on behalf of the WWEDF and shall be approved by the WWEDF Board unless the board delegates
certain authorities to local loan committees or the Program Administrator.
There shall be no loan loss reserve established.
5.6 RECORDKEEPING
In addition to all other requirements, the financial management records must be comprehensive and designed to provide the
following information, which may be provided through an internal accounting system approved by the WWEDF Board and
maintained by the Program Administrator:
1) Accounts that record all deposits and disbursements to and from the loan fund, including funds used for administration,
federal funds, CDBG funds to be returned to WEDC or the Wisconsin Department of Administration, funds available for
WWEDF financing programs, and contributions from each RLF local government or other sources.
2) Loan repayment registers that record repayments made by each business receiving a loan from the WWEDF. This register
also tracks the balance of repayments from all loans from the WWEDF.
3) Collection Register for every loan made. Each register contains the business name, loan date, loan number, loan amount,
terms, and date repayment begins. Payments are divided into principal and Interest payments, with a decl ining principal
balance.
4) Program Administrator shall prepare periodic status reports for the WWEDF Board, County and Community Loan
Committees, Communities, WEDC or the Wisconsin Department of Administration.
Written records of all program activities, including program meetings, loan applications, and related documents, shall be
maintained in appropriate files by the Program Administrator. Authorized personnel shall maintain all project files in a secure,
fireproof place with limited access. Certain records shall be available electronically to provide access to local governments,
economic groups and the WEDC or the Wisconsin Department of Administration. County Loan Committees and local RLF
administrators shall provide copies of all activity relating to the WWEDF to the Program Administrator on a timely basis or as
requested. A documentation file should be established and maintained by the Program Administrator for each loan recipient and
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contain the following:
1) Loan Application. All applications, business financial statements, personal financial statements, credit reports, resumes,
business plan documents, and other supporting loan information submitted to the WWEDF, including all applicable
correspondence, shall be placed in a Loan Application file.
2) Loan Approval. This file must contain action taken on the loan and will include recommendations and evidence of loan
approval.
3) Loan Closing. All legal documents, including but not limited to debt and security instruments, loan agreements, and other
applicable documents made in accordance with loan disbursement procedures. On a case-by-case basis, Counsel shall
be retained to ensure file compliance and proper documentation.
4) Tickler System. Notices shall be generated systematically to serve as a reminder on time-sensitive items. Tracking such
information is vital in protecting security interests, ensuring lien perfection, and monitoring loan performance. The
following is a non-exhaustive list of items to be indexed in tickler format, when applicable:
a. Expiration dates pertaining to property, commercial liability, business loss interruption, and key-man life insurance
policies
b. Due dates and requests for financial statements as stipulated in the loan agreement
c. Periodic site visits and/or management conference calls
d. Lapse dates relating to UCC financing statements should be generated no later than 45 days prior, but not more
than 180 days before, UCC filing expiration
e. Scheduled dates to perform annual reviews and monitor covenant compliance
f. Due dates for any current or outstanding tax obligations (i.e. property, payroll, etc)
g. Dates for any imminent changes in loan repayments or reminders regarding non-compliance deadlines or default
dates.
5) General Information. Standard loan recipient reporting and contact should be made to properly assess credit risk and any
deficiencies that may exist. In all cases, one or more of following should occur on an annual basis:
a. Financial statements prepared by a qualified accountant and submitted in a form acceptable to the WWEDF Board,
County or Community Loan Committee
b. Letters and progress reports
c. Site visit and/or management conference calls. A summary of any visits or calls shall be logged for future reference.
d. Amortization reconciliation and repayment monitoring to target unwanted credit behaviors and to assist in uncovering
larger issues
Loan reviews shall be performed through a culmination of collecting and analyzing the above mentioned. A report summary shoul d be
completed to address the following credit topics: punctuality of payments, collateral considerations, sales innovation, financial health
of the business, presence of material liens or lawsuits, violations of loan covenants, and suggested corrective actions. In t he event a
business is experiencing difficulty complying with the terms and conditions of the loan agreement, note or ot her legal contract, the
Program Administrator shall attempt to work with the borrower to correct identified deficiencies through mutually agreeable a ctions,
including restructuring the loan to protect the fund's interest while meeting the business' needs. In the event the findings of the loan
review uncover serious deficiencies, particularly the imminent threat or occurrence of default, the Program Administrator shall consult
with the County or Community Loan Committee if they approved the loan or the WWEDF Board if they approved the loan and/or the
WWEDF’s Legal Counsel to discuss and act on matters to remedy any expected or existing problems of a transaction.
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Western Wisconsin Economic Development Fund Administrative Manual
Table 5.1 – WWEDF Organization Decision Flow Chart
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