Agenda - 06-03-2014 - 6a - Laserfiche WebLink

Browse Search

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 25 1) approve a 12 month lease with Morinaga America Foods for temporary office space in the Link Government Services Center at 200 South Cameron Street, Hillsborough; and 2) authorize the Chair to sign all necessary documents upon final review of the County Attorney. VOTE: UNANIMOUS 8. Reports a. Report on Orange County's "Small Business Loan Program" The Board received a report on the "Small Business Loan Program ", including details on current balances and activity, and received information on the Economic Development Office's new marketing efforts to increase awareness and demand for the program by potential small business borrowers in Orange County. Steve Brantley said the Small Business Loan Program was created to provide an alternative funding option to small, local companies that have difficulty obtaining traditional bank funding, but which meet the requirements of the Program's loan fund. He said the typical loan ranges from $5,000 up to $50,000 and the rate varies from prime plus 2 percent on the low end to prime 3 percent on the largest loans. He said the terms range from 5 -7 years and the origination fee is $100 minimum. He said the guidelines for making a lending decision include: applicant's credit worthiness; cash flow coverage; debt to equity ratio; and other collateral. He said there are a few restrictions, and only for - profit companies are eligible. He said an applicant cannot have revenues exceeding $3 million, and there cannot be any criminal history. Steve Brantley said there are challenges to expanding the program, including a general lack of knowledge about the program. He said staff is working on ad placements and new documents. He said the improving economy have also presented a challenge, as this program is competing with other lenders and has a slightly higher cost of borrowing. He said some of the applicants need external counseling to generate documentation. Steve Brantley said another challenge has been staff turnover. He said it took several months to hire someone for the position that handles much of this program. Steve Brantley said the non - profit was created in 1999, but few loans were actually issued in the first few years. He said the Orange County Board of County Commissioners (BOCC) unanimously approved, on March 13, 2007, the transfer of $75,000 to the loan program, and the first loan was made in March of 2009. He said the Board also approved an additional $75,000 transfer to the program, though it was not made at the time. He said the second loan was made in September of 2009, and in mid 2010, $200,000 was transferred by the manager to the loan program from the Chapel Hill Orange County Visitor's Bureau fund balance. He said this is the seed money that led to many of the new loans since that time. He said there are currently 7 outstanding loans, to 7 businesses, totaling $333,000, and none are past due. He said there are also a total of 3 new loan requests in process. Steve Brantley reviewed the following information from the abstract: Current Status: Balance in SunTrust Checking Account $160,457.69 Article 46 Quarter Cent Sales Tax Allocation $200,000.00 Total Fund Available $ 360,457.69 Companies that have utilized the Loan Program: