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14 <br /> COLLATERAL <br /> Loans shall be secured by appropriate forms of collateral, with recorded first lien positions as <br /> appropriate. Acceptable forms of collateral will be based on commonly accepted definitions <br /> (fixed assets, inventory, accounts receivable, land, building, equipment, or personal assets). <br /> Advance rates should be limited to the following percentages: Inventory - 50%; accounts <br /> receivables - 70% on accounts less than 90 days in age; unimproved real estate - 50%; <br /> commercial real estate - owner-occupied maximum 800/6 LTV, or 85%LTV on personal real <br /> estate; new equipment- 80%, and used equipment- 60%. <br /> SUGGESTED LOAN GUIDELINES <br /> 1. Creditworthiness - Although applicants will be considered with credit ratings showing a <br /> history of accounts up to 30 days past due, preference will be given to borrowers with <br /> good credit ratings. Applicants with bankruptcy or repossessions listed on their credit <br /> report will, in most cases, be considered too great a credit risk for this program. <br /> 2. Cash Flow Coverage - The loan program is targeted to applicants with a cash flow <br /> coverage, prior to new debt, (as hereafter defined) of not less than 1.1 to 1 to current <br /> maturities of long-term debt. Cash Flow is further defined as net income plus <br /> depreciation. <br /> 3. Debt To Worth - The loan program is targeted to applicants whose total debt does not <br /> exceed net worth by 3 to 1. <br /> LOAN PROGRAM ADMINISTRATION <br /> Administration of this loan program shall initially be performed by the Orange County Economic <br /> Development Commission. An outside vendor acceptable to the financial institutions and the <br /> County will be utilized to underwrite and service these loans, to include billing and generating <br /> administrative reports. <br /> PROCEDURE <br /> 1. Applicants will be referred to the Orange County Economic Development Commission <br /> who will meet with them and process applications. This process will utilize the services <br /> of the NC Small Business&Technology Development Center. <br /> 2. Completed applications will be submitted to the Loan Committee no later than two <br /> 5 <br />