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Attachment A <br />Orange County Small Business Loan Program <br />Recommendations for Change <br />In formal action at its November 9, 2006 meeting, the Orange County Economic Development <br />Commission (EDC) endorsed the following recommendations regarding the operation of the <br />Orange County business loan program and the Orange County Small Business Loan Program <br />Company (the Company): <br />a. That the $75,000 remaining in a County loan loss reserve account be granted to the <br />Company to serve as seed money for a revolving loan fund <br />b. That the County grant an additional $75,000 to the Company to restore the full amount <br />originally committed to the Program <br />c. That the Company solicit grants from banks and other entities to enhance the fund after a <br />track record of successful lending is established <br />d. That program operating policies and procedures be .revised to make the loan program <br />more accessible to borrowers (specifics to be determined by the Company board) <br />e. That the composition of the Board of Directors of the Company be changed to include <br />• 2 small business owners (1 of whom should have at least 3 years in business) <br />• 2 bankers (preferably based in different parts of the county) <br />• 1 Board of County Commissioners member <br />• 1 Economic Development Commission member <br />• the EDC Director <br />EDC member Jim Evans, who has had experience with a similar fund operated by the Rural <br />Center and is currently with Harrington Bank, led a discussion of key ideas, shown in <br />Attachment B. <br />EDC members stressed the importance of informing potential borrowers about the extensive <br />technical assistance resources available in the community. Other ideas included providing <br />incentives to attend business planning classes (for example, possibly a reduced interest rate) <br />and convening small business borrowers classes, akin to first time home-buyers classes. EDC <br />members stressed the need for the company directors to be willing to take risks. <br />At a meeting of the Board of Directors of the Company on December 12, 2006, the members <br />unanimously endorsed the EDC recommendations, agreeing that the former program structure <br />was overly cumbersome and restrictive. Among the possible changes that have been discussed <br />are: <br />• making non profit enterprises eligible for loans <br />• making Orange County businesses whose owners live outside the county eligible for <br />loans <br />• specifically excluding medical charge offs (disproportionately held by low income and <br />uninsured persons) from credit history considerations <br />• using the experience of the business owners on the Board to ensure that the application <br />forms are relevant and user-friendly <br />• strengthening marketing of the program through community partners <br />