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14 <br /> for-profit and non-profit businesses in Carrboro that have been turned down by at least three <br /> banks. Priority is given to projects in the downtown business district. In the past 11 years, <br /> approximately 20 projects have been funded, totalling approximately $750,000. <br /> A chart created by the Small Business and Technology Development Center summarizing Federal, <br /> State and local programs is provided as Attachment 1. <br /> After looking at the various options available, discussions were held with bankers and business <br /> assistance providers to develop specific criteria. In December 1995, draft operating policies and <br /> procedures were presented to the Board of County Commissioners for input. Final draft <br /> procedures and exploration of administration options were completed in spring and summer of <br /> 1996. The Orange County program most resembles the Raleigh Success Program. Final draft <br /> operating policies and procedures are provided as Attachment 2. <br /> After reviewing the proposed loan pool, it is the County Attorney's opinion that, in order to be <br /> legal under North Carolina law, a non-profit corporation needs to be formed. See Attachment 3. <br /> The non-profit corporation would legally function as the debtor in the bank transactions. The <br /> County would contract with the non-profit to perform loan pool administration. <br /> The proposed administration of the program would involve several groups. <br /> • Marketing - Economic Development Commission, using existing staff <br /> • Technical Assistance, Loan Package Preparation - Small Business and Technology <br /> Development Center, as part of their on-going contract <br /> • Underwriting and Loan Packaging - A third party contract <br /> • Servicing and Collection - A third part contract <br /> • Follow-up and Administration - New non-profit, using existing EDC staff <br /> The budget implications are as follows: <br /> • $50,000 per year for three years as a loan loss reserve <br /> • Maximum of$11,000 annually in professional services to contract for underwriting, <br /> collection, and servicing <br /> • $1,500 in additional supplies and printing costs for marketing <br /> • $23,000 (estimated) in staff time that will not be a new cost <br /> There are numerous options that can be considered when developing a loan pool. Each local <br /> program operating in North Carolina is different. A summary of the most important specifics is <br /> provided as Attachment 4. <br /> Recommendation: As the Board directs. <br />