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150 <br /> MINUTES - <br /> ORANGE COUNTY ECONOMIC DEVELOPMENT COMMISSION <br /> DECEMBER 11, 1986 <br /> LIBRARY MEETING ROOM <br /> 300 WEST TRYON STREET <br /> HILLSBOROUGH, NORTH CAROLINA <br /> 2:00 P.M. <br /> MEMBERS PRESENT. John McKee, Elaine Parker, Maury Klein, John <br /> Gastineau, Dennis Howell, Paul Williams. <br /> MEMBERS ABSENT Lynn Wilson, Pat Crawford, Norman Weatherly. (Ex- <br /> Officio: Ken Thompson, Bob Morgan, Elaine Hicks, Harding Hughes, <br /> David Taylor.) <br /> OTHERS PRESENT. Lee Capps, James Harris, .onmeke Hermens, Lee <br /> Butzin. <br /> 1. Jlinutes_of Last Meetina. . <br /> - The minutes of the meeting held November 13, 1S86 were approved <br /> on a motion by John Gastineau, seconded by Paul Wiltiams. <br /> 2. Tbp SBA 504 Sapp Program. <br /> Sylvia Price asked to add en .item to today's meeting concerning <br /> SBA 504 loans, saying she thought it would be beneficial to EDC <br /> members to be informed, and to take action toward making these loans <br /> available in Orange County. She introduced Janneke Hermans and Lee <br /> Butzin, representatives of the Capital Economic. Development Corpor- <br /> ation (CEDCO) , who made a joint presentation regarding SBA 504 loans. <br /> Janneke Hermans and Lee Butzin explained that the small Business <br /> Administration (SBA] 504 Loan Program provides combined private and <br /> public financing, up to 90%, at long terms and affordable rates, to <br /> small businesses for the purchase of fixed assets (land, building, <br /> construction, renovation, machinery and equipment with a tong-term <br /> useful life). SBA 504 loans cannot be used for working capital. It <br /> was explained that the eligibility for the Loans is restricted to <br /> small businesses, whose net worth does not exceed $6 million, and <br /> whose average profit after tax for the Last two years does not exceed <br /> $2 million. Ineligible businesses and projects include: real estate <br /> companies, developer deals, financial institutions, unregulated <br /> media, and non-profit institutions. New start-up companies are <br /> eligible for these Loans, though it can be difficult. <br /> The minimum SBA 504 loan is $50,000, for a minimum total project <br /> cost of $125,000. SBA terms may be either 10 or 20 years. <br /> Most loan packages are brought forward through banks, and <br /> repayment ability must be clear, as well as sufficient collateral. <br /> Typically the bank will take a first deed of trust, the SBA takes a <br /> second deed of trust, and the borrower puts in the balance, which <br /> must be at least 10%. <br />