Agenda - 03-13-2007-9e Orange County Small Business Loan Program

Browse Search

The Company had a 9-member Board, including 6 bank representatives and 3 County representatives. The operating structure was designed as follows: 1. EDC staff and participating banks market the program to potential borrowers 2. EDC staff provides initial review of applications 3. Full 9-member Board makes loan decisions 4. Upon approval, each bank lends 1/8 of loan amount to Company and Company re-lends to borrower at prime plus 5. EDC staff services loan (Each monthly payment collected to be split 8 ways and repaid to banks) During the three years of bank commitment, 60 qualified borrowers received loan packages. Seven of these fully completed the applications. One package was taken to the Board; however no loans were made. The Economic Development Commission and the remaining members of the Board of Directors of the Small Business Loan Program Company have endorsed the recommended loan program changes shown in Attachment A and recommend that the Board of County Commissioners grant the $75,000 currently held in the loan loss reserve account and an additional $75,000 to the non-profit Company to establish a revolving loan fund. FINANCIAL IMPACT: A total of $150,000 would be granted to the non-profit Orange County Small Business Loan Program Company, an amount equivalent to the original loan loss reserve established by the County in 2000. Funds totaling $75,000 remain in the account, and the remaining funds could be transferred immediately or included in FY2008 funding. RECOMMENDATION(S): The Manager recommends that the Board approve the grant of funds to the Company. Further, the Manager recommends that the EDC provide regular quarterly status reports to the Board on the progress of the loan program and the operations of the Company, including all changes to the loan program policies such as making non-profit enterprises eligible for loans.