Agenda - 04-15-2014 - 8a - Laserfiche WebLink

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19 Attachment 2 collection agency. LOAN ANALYSIS The Loan Committee shall review and consider a number of items in determining whether a loan should be made. Those items shall include at least the following: 1. Business plan. 2. Current and projected employment (including future need for employees; skill levels and education required; employee compensation, health insurance, and other benefits). 3. Business financial statements. (Past two years plus interim) 4. Tax returns. (Past two years - personal and business) 5. Pro formas (financial statement projections that may include monthly cash flow, profit and loss, and additional statements as required by the Loan Committee) to determine that there will be sufficient cash flow to meet obligations for 2 years. 6. Personal financial statements. 7. Information regarding collateral and a current personal credit report. 8. Other available financing including, but not limited to, whether other financial institutions have agreed to consider traditional debt financing and under what circumstances. 9. Any other information that the Loan Committee determines that it needs. SUGGESTED LOAN GUIDELINES 1. Creditworthiness - Although applicants will be considered with credit ratings showing a history of accounts up to 30 days past due, preference will be given to borrowers with good credit ratings. Applicants with bankruptcy or prior to repossessions listed on their credit report will, in most cases, be considered too great a credit risk for this program. 2. Cash Flow Coverage -The loan program is targeted to applicants with cash flow coverage, prior to loan program debt, of not less than 1.1 to 1 to current maturities of long -term debt. Cash Flow is further defined as net income plus depreciation. 3. Debt to Net Worth- The loan program is targeted to applicants whose total debt does not exceed net worth by 4 to 1. 4. Collateral - Loans shall be secured by appropriate forms of collateral, with recorded first lien positions as appropriate. Acceptable forms of collateral will be based on commonly accepted definitions (fixed assets, inventory, accounts receivable, land, building, equipment, or personal assets). PROCEDURES 1. Applicants will be referred to the Orange County Economic Development department (Department). Department staff will meet with applicants and process applications. Applicants may be referred to the SBTDC for consultation. 2. Completed applications will be submitted to the Loan Committee no later than two weeks prior to its next scheduled meeting.