|
|
|
|
|
|
|
|
|
ARK-LA-TEX INVESTMENT AND DEVELOPMENT CORPORATION
|
|
SBA Loan Program The ARK-LA-TEX Investment & Development Corporation (AIDC), a CDC affiliate, is certified by the U.S. Small Business Administration (SBA) as a Certified Development Company. Its primary focus is to serve Northwest Louisiana by providing qualified small businesses with financial assistance through government loans. The benefits are direct and threefold: generation of new business, job creation and retention, and low rate, fixed, long-term financing of fixed asset and capital goods. Types of financing include land acquisition and preparation; building acquisition or construction; building recycling or renovation; purchase of machinery for production and services; purchase of equipment, either for the building or for the company's business; and other qualifying fixed assets. The
504 program is available to businesses with a net worth of less than $6
million, and an average income of less than $2 million over past two
years. Long-term fixed
asset loans up to 20 years. Projects
are financed by a first mortgage loan from a private lender (bank), and
a second mortgage 504 loan made by a Certified Development Corporations
and funds provided by the small business concern.
Interest rates are based on current Treasury issues plus a small
spread for administration. CDC's
loan portion cannot exceed 40% of a project.
The funds must be used for fixed assets and, generally, must
create one job for every $35,000 of SBA funds.
Start-ups must contribute 10-20% equity to total start-up. The
SBA "504" program allows AIDC to generate a loan package
consisting of financing from three sources.
The private lender (banks, savings & loan associations,
insurance companies, etc.) generally provides 50% of the total project
cost at a conventional rate and term.
AIDC provides 40% of the project cost, at the Treasury Bond rate.
This rate is set at the time the debentures are sold and is fixed
for the life of the loan. The
term is 10 or 20 years, and is tied to the expected life of the assets
being financed. Funds for
the AIDC loan are provided from the proceeds of the sale of the
debentures. AIDC's loan
will be secured with a second mortgage on all collateral offered to the
private lender. The
remaining 10% of the project is designated as the equity injection and
is generally provided by the borrower. A
typical AIDC project: $
250,000
Equity Injection 10%
1,000,000
AIDC Debenture
40%
1,250,000
Private Lender
50% $2,500,000
100% A
new or expanding project should be, as a general rule, for a minimum of
$250,000. There is no
maximum total project size. A
business may qualify to participate in the SBA "504" Program
through AIDC if its net worth does not exceed $6 million and its net
income after taxes is not more than $2 million.
The financial assistance must be used for fixed asset financing
only, which includes the acquisition of land, buildings, new
construction and leasehold improvements.
Capital equipment and renovation can be financed in conjunction
with the purchase of a building. Ineligible
concerns include non-profit businesses, media firms, lending
institutions and real estate companies.
Since the purpose of the program is to provide economic stimulus
to the area, the proposed project must create new jobs or retain jobs
that would otherwise have been eliminated. The
prospective client must furnish AIDC with various financial and
narrative documents which are necessary for a proper evaluation of the
proposed project. The
following documents should be presented to AIDC before a formal
application is submitted: (1) a written description of the project; (2)
itemized statement of project costs; (3) descriptions and number of new
or retained jobs; (4) current financial statements of the company or a
pro forma on a new venture; (5) personal financial statements of all
principals; (6) history of the company or projections on a new venture;
and, (7) resumes on all principals and key personnel.
The AIDC staff will analyze each loan application from a credit
and job creation standpoint. The
loan application must then be approved by the AIDC Board of Directors,
as well as the private lender and the Small Business Administration.
Portfolio Manager/Loan Officer Ark-La-Tex
Investment & Development Corporation
P.O. Box 37005 Shreveport, LA 71133-7005 Phone: (318) 632-2022 Fax: (318) 632-2099 E-mail:
jkelly@shreve.net
USDA
Revolving Loan Program AIDC
also administers CDC's USDA Rural Development's Intermediary Relending
Program to make available funding for qualified new and expanding
businesses located in the rural areas of the ten-parishes served by CDC
in Northwest Louisiana. Loans amounts range from $10,000 up $150,000 (75% of project
costs). The focus of this
program is to create or retain jobs in the rural areas CDC serves. The program supplements private lenders' efforts by either
participating with them on special financing projects or by direct loans
to borrowers who cannot qualify under the private lenders' rules.
Contact
Information
Portfolio Manager/Loan Officer Ark-La-Tex
Investment & Development Corporation
P.O. Box 37005 Shreveport, LA 71133-7005 Phone: (318) 632-2022 Fax: (318) 632-2099 E-mail:
jkelly@shreve.net The Coordinating and
Development Corp. Copyright 2003, The Coordinating and Development Corporation. Redistribution to all others interested in economic development is strongly encouraged. Please cite The Coordinating and Development Corporation whenever portions are reproduced or redirected.
| Home |
Contact Us |
Site Map | CDC Executive Committee Members |
CDC Divisions | This Site Created, Hosted and Maintained by Desoto Data Base, LLC |
