HomeMy WebLinkAbout20130285.tiffRESOLUTION
RE: APPROVE LOAN FUND GRANT AGREEMENT AND AUTHORIZE CHAIR TO SIGN -
COLORADO ENTERPRISE FUND, INC.
WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to
Colorado statute and the Weld County Home Rule Charter, is vested with the authority of
administering the affairs of Weld County, Colorado, and
WHEREAS, the Board has been presented with a Loan Fund Grant Agreement between
the County of Weld, State of Colorado, by and through the Board of County Commissioners of
Weld County, and Colorado Enterprise Fund, Inc., commencing upon full execution, with further
terms and conditions being as stated in said Loan Fund Grant Agreement, and
WHEREAS, after review, the Board deems it advisable to approve said agreement, a
copy of which is attached hereto and incorporated herein by reference.
NOW, THEREFORE, BE IT RESOLVED by the Board of County Commissioners of
Weld County, Colorado, that the Loan Fund Grant Agreement between the County of Weld,
State of Colorado, by and through the Board of County Commissioners of Weld County, and
Colorado Enterprise Fund, Inc., be, and hereby is, approved.
BE IT FURTHER RESOLVED by the Board that the Chair be, and hereby is, authorized
to sign said agreement.
The above and foregoing Resolution was, on motion duly made and seconded, adopted
by the following vote on the 28th day of January, A.D., 2013.
ATTEST:
Weld County Clerk to the Board
BY:
Deputy Cle
APPROViz'fl AS
torney
Date of signatureFEB 12 2013
BOARD OF COUNTY COMMISSIONERS
WELD COUNTY, COLORADO
William F.
ougla
to va Ctc.Qe"-
ademach r Pro-Tem
,
Sean P. Conway
DILL
Mike Freeman
EXCUSED
Barbara Kirkmeyer
2013-0285
BC0044
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colorado '•
enterprise fund
we support big dreams. we support small business.
January 18, 2013
Bruce T. Barker, Esq.
Weld County Attorney
P.O. Box 758
1150 "O" Street
Greeley, CO 80632
Dear Mr. Barker,
aED
ff I
JAN232013
Enclosed please find two executed copies of the Weld County Business Loan Fund Grant Agreement
between Colorado Enterprise Fund and Weld County.
If approved by the Commissioners, please let me know if wiring instructions are needed.
We appreciate the support of the Weld County staff and Commissioners on this initiative. We look
forward to a long and productive partnership!
Sincerely,
Cecilia H. Prinster
President and CEO
End. Weld County Business Loan Fund Grant Agreement (2 copies)
2013-0285
1888 Sherman Street, Suite 530 : Denver, Colorado 80203 303.860.0242 f: 303.860.0409 coloradoenterprisefund.org
WELD COUNTY BUSINESS LOAN FUND
GRANT AGREEMENT
THIS WELD COUNTY BUSINESS LOAN FUND GRANT AGREEMENT (the
"Agreement") is made this _ day of 2013, by and between Weld County,
Colorado, by and through the Board of C my Co issioners of Weld County, whose address
is P.O. Box 758, 1150 O Street, Greeley, Colorado 80632 ("Grantor"), and the Colorado
Enterprise Fund, Inc., a Colorado nonprofit corporation, whose address is 1888 Sherman Street,
Suite 530, Denver, Colorado 80203 ("CEF").
WITNESSETH:
WHEREAS, CEF is a nonprofit Community Development Financial Institution
("CDFI"), founded in 1976 to help small businesses, providing small business loans to
entrepreneurs who are unable to obtain financing from traditional sources, and providing
borrowers with management consulting and business training, and
WHEREAS, Grantor has agreed to grant to CEF the sum of $200,000 for the purpose of
establishing a community -sponsored loan fund to be called the Weld County Business Loan
Fund ("Fund"), a community sponsored lending program (the "Weld County Business Loan
Fund Program" or "the Program"), which will be administered by CEF in accordance with the
terms and conditions set forth in this agreement, and
WHEREAS, the mission of the Program is to provide access to capital in the form of
business loans to small businesses with gross revenues generally under three (3) million dollars
annually that cannot obtain financing through traditional sources, but who are capable of
sustaining a business and repaying debt, and
WHEREAS, the goal of the Fund is to provide access to credit for entrepreneurs who are
"unbankable" for a variety of reasons, with all loans being to businesses with their primary
locations within Weld County (outside of Greeley), and
WHEREAS, the goals of the Program are to:
a. Bridge the gap for businesses which might eventually qualify for bank financing and
prepare them for traditional bank relationships, and
b. Facilitate business creation and retention for small businesses that would access the
Fund, and
c. Collaborate with other Weld County resource partners to promote entrepreneurship
and business innovation as a means of investing in the economic success of the
community, and
d. Encourage business ownership and self-employment as a means of economic self-
sufficiency and job creation.
NOW THEREFORE, in consideration of the premises, promises and obligations set forth
herein, the Grantor and CEF agree as follows:
A. Loan Fund Grant. Within 10 business days of mutual execution of this Agreement,
Grantor shall deposit with CEF a grant in the sum of Two Hundred -Thousand Dollars
($200,000) to be placed in the Loan Fund described below. Upon deposit of said
grant of funds with CEF, CEF shall immediately deposit into the Loan Fund an initial
matching amount of $100,000. The Loan Fund shall be used for the issuance of loans
by CEF to businesses as defined below. Once the Program has issued $250,000 in
total loans, CEF will provide an additional $100,000 to be used for loans. CEF shall
provide this additional match within 15 business days after the $250,000 total loan
threshold has been reached. Any additional grant by Grantor shall require either a
new agreement similar to this agreement, or an amendment hereto.
B. Creation of Loan Fund. CEF shall create and manage a segregated fund in CEF's
name which shall be used exclusively for the Weld County Business Loan Fund
Program.
C. Program Operating Costs. CEF shall pay all costs associated with issuing loans from
the Loan Fund pursuant to the Program.
D. Business Eligibility. In order to be eligible for a business loan:
1. At the time of application and throughout the term of the loan, the business must
have its primary office/headquarters or operations in Weld County (outside of
Greeley).
2. There are no restrictions on the type of business eligible for loans so long as the
company is a private, for-profit businesses. Expansions of existing businesses
and new business start-ups will receive equal consideration. Priority will be given
to primary projects: manufacturing, wholesale, distribution, etc. Retail and
service industry projects are typically not eligible. The company must be
adding/retaining jobs. Additionally, all activities of the business must be legal,
are in the best interests of the community, and fit the criteria contained herein.
3. The business must file a complete application information and meet Program
underwriting criteria established by CEF, as set forth below.
E. Financial Assistance Guidelines.
1. Loan Structure. Any variation from these guidelines will require approval by
Grantor:
a. Loans shall be a maximum of $50,000. Loans may be made in any increment
up to the maximum.
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b. A minimum of one FTE job will be created/retained for every $20,000 of a
Program loan on average.
c. Participation in the Program is targeted at those companies who have
exhausted all other sources of "gap" financing.
d. CEF may make additional amounts available from non -Fund sources as it
deems reasonable to serve larger financing needs.
2. Fees, Term, Interest Rates, Collateral, and Business Assistance.
a. Term. The term of the loan will typically be no longer than 10 years, unless
there is a need to use the loan to leverage other financing, such as Small
Business Administration funds. Any re -write of the loans able to extend the
original term by up to an additional 2 years. Suggested loan terms: working
capital and inventory: 2-5 years; fixtures and equipment: 5 years; owner
occupied real estate: 10 years; others shall be on a case by case basis.
b. Interest Rates. The interest rates shall be equal to, or less than, CEF standard
interest rates. The interest rate may be adjusted downward to no less than 3%,
based upon the needs of the company. The interest rate or payback period
may be accelerated if cash flows exceed or meet projections. Interest rates
charged shall not exceed set Federal limits.
c. Fees. Loan application fees shall be a minimum of $100 to cover all costs
related to loan processing expenses. Closing fees shall be capped at 2% of the
total Program loan assistance.
d. Collateral. Effort shall be made to collateralize all forms of Program loan
assistance. Program loans may assume a second or third position. Personal
and business assets available to repay the loan in the event that cash flow is
not available for repayment (such as in the case of a liquidation of a failed
business) will be pledged wherever possible.
e. Business Assistance.
1) Under many circumstances loans will be made to applicants with attractive
flexible rates and terms.
2) Partial loan guarantees may be made to leverage conventional funding
sources.
3) Equity positions may be taken when deemed appropriate.
4) Partial loan purchases can be made to motivate the lending institution to
make the remainder of the loan.
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F. Permitted Uses of Loan Proceeds. Loans from the Fund may be used for most
business purposes including, but not limited to the following:
1. Expenditures for working capital, including inventory, salaries, and account
receivables.
2. Expenditures for fixed assets, including equipment, purchase of existing
buildings, land (when part of a business project), renovations of interiors and
exteriors of commercial building, tenant finish and property improvements, and
new construction of facilities for operations.
3. Start-up expenses, and expenditures for operations.
4. Purchase of a business or franchise
G. Non -permitted Uses of Loan Proceeds. Loans may not be used to pay any of owner's
remuneration, including but not limited to wages, bonuses and the like, or to pay for
legal expenses incurred in defending against a criminal violation, or to pay for
penalties assessed for criminal violations, or to pay adverse civil judgments stemming
from operation of the business. Loans shall not be used to pay fees, assessments,
liens or penalties due to the failure of the business to collect or remit applicable taxes
when due. Uses incompatible with or illegal under local regulatory authority will not
be permitted.
H. Underwriting and Application Process, and Criteria Considered by CEF in Loan
Decision Making Process. CEF generally will follow its standard underwriting and
loan application process. For loans made from the Fund, among the factors CEF will
consider when making loan decisions, are:
1. The company using the loan proceeds will employ some low/moderate income
people, as defined by the State of Colorado.
2. Higher than average wages will not exclude a loan from consideration.
3. Jobs created that are permanent positions.
4. When two or more proposals compete for the same funds, the project which best
fulfills the criteria set forth in this Paragraph H will be given priority.
5. The project will help to diversify the local economy.
6. CEF shall not offer Program loan assistance to any company when financing is
available from conventional sources at reasonable terms, rates, and conditions,
unless it is found to be necessary to further the economic development objectives
of Grantor.
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7. Owner's equity in business. An owner's investment in the business in terms of
cash, equipment, inventory, etc. Current CEF minimums are ten percent (10%) of
the total funding needs. For start-ups, CEF may require in excess of fifty percent
(50%) depending on the size and nature of the venture.
8. Credit. Credit history shall be evaluated on three levels: credit score, bankruptcy
index and itemized evaluation. A lower score and/or BK index may influence the
amount loaned if it does not disqualify an applicant. Typically, late payments,
judgments, liens, bankruptcy, etc., are evaluated in light of whether or not these
issues are of a continuing and current nature, and if they are not being addressed
in any way.
9. Cash flow and profitability. The ability of a business to meet all of its expenses
with revenue from its operations will be considered. Without adequate cash flow
to pay expenses and service debt, etc., a business will not be viable for long.
Typically, CEF will look at global cash flow which takes into consideration the
business owner's business and personal income resources offset against the
business and personal debt service requirements. It will analyze such documents
as financial statements, tax returns and bank statements to arrive at a complete
picture of cash flow capacity.
10. Loan Process. The following processing procedure is typically followed:
a. A loan application is received on-line (or entered by CEF staff), often after
initial phone discussion to discuss feasibility and to identify potential
challenges, answer initial questions and obtain additional info. An applicant
may have been prescreened by this time by a banker or a Small Business
Development Center (SBDC) counselor.
b. The application is evaluated based upon above -described criteria. c. A
decision is made regarding the request. Loan approvals shall follow CEF's
standard approval procedures and processes. If Grantor has provided written
notice of objections to a deviation from usual underwriting standards, CEF
shall give consideration to such objection, but shall at all times retain final
decision making authority regarding such loan.
c. An approved loan will be closed as soon as possible after approval. If a loan is
turned down (which can occur at any point in the process), the applicant will
be informed of the reasons for denial of credit in writing or by phone, or as
may otherwise be required by law.
d. At the loan closing, the borrower shall be given information regarding CEF's
technical assistance and training programs. These programs will sometimes be
coordinated with the SBDC depending upon need.
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11. Program Costs and Loan Repayments.
a. CEF shall retain all interest earned and loan fees to cover the costs of
administering the program, which include direct costs for staff time, mileage,
marketing and outreach, business counseling and technical assistance,
recording fees, loan servicing, reporting and accounting and, indirect costs
including phone, rent, supplies, etc. Staff time includes the cost of loan
officer meetings with bankers, applicants and borrowers, loan closings, plus
additional staff time in the office for underwriting, preparation of loan
documents, loan servicing, phone calls to applicants and borrowers,
collections, business mentors, etc. These costs assume no additional
"satellite" office space expense for the Fund (donated space or site visits only)
over and above CEF's normal office space.
b. Principal amounts repaid from Fund borrowers will be returned to the Fund to
be loaned out again under the Program parameters herein to businesses
located in Weld County in perpetuity.
c. Loan losses shall be absorbed first by any grant funds in the pool, then pro -
rata by the remaining interests in the Fund. Loan losses will be allocated to
the respective contributions in the Fund on a pro -rata basis, based on the
principal each party has contributed to the Fund when the loss is determined.
Nothing in this Agreement shall be construed to require Grantor to replenish
any portion of the Fund that is a loan loss, and any such loan loss is not
considered to be a debt or the Grantor. CEF will exercise all reasonable
measures to collect loans that are in default.
I. Marketing and Public Relations for Program.
1. CEF will be responsible for:
a. Conducting bank officer orientation sessions about the program; ongoing
outreach to bank contacts, including direct mail to participating officers (bank
provides lists); follow-up and coordination with banks for referred deals; and
other ongoing bank interface activities.
b. Maintaining regular contact with local SBDC for business loan feasibility
counseling, workshops marketing the program and mailings.
2. Grantor and Weld County economic development agencies, including SBDC, will
be responsible for:
a. Providing introductions to community contacts, including banks, economic
development organizations, chambers of commerce, etc.
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b. Providing the services of the Grantor's Public Information Officer ("PIO") to
promote the Program and Fund.
J. Reporting. CEF shall ensure that reports are provided to the Grantor's designated
staff.
1. Quarterly reports shall include:
a. Fund balance in deposits waiting to be loaned.
b. Total Loans Outstanding balance and current status (paid as agreed or
delinquent with number of days delinquent).
c. Loan list with business name, origination date, amount, term, rate, current
balance and status.
d. CEF's quarterly financial statements.
2. On an annual basis, a copy of CEF's Audited Financial Statements shall be
provided to Grantor within 150 days of CEF's fiscal year-end.
3. Upon reasonable notice, and not more than twice per fiscal year, at Grantor's
expense, Grantor may examine the loan applications, books, records, accountings,
documents, invoices or other records related to the use of the Funds. At Grantor's
request, CEF shall provide copies of related documents requested by Grantor.
K. Miscellaneous.
1. All proposed loan funding will be used for new loans except when the CEF team
in consultation with the Grantor agrees that the Fund purpose is served via the
prudent refinancing of existing debt.
2. Direct loan closing expenses will be funded by the borrower and may be financed
in the loan balance or out of pocket by the borrower.
3. Write-offs of bad debts will be charged to the Fund balance as stated above in
Section H.12.c.
4. For purposes of Program set-up, ongoing reporting and interface with CEF, the
Director of Finance and Administration of Weld County or her designated staff
will serve as the primary representative of the Grantor.
L. Termination. The monies provided for the Fund pursuant to this Agreement ("Grantor
Funds") shall be used solely for the purposes described above. If the Grantor, in its
sole discretion, determines that not enough loans have been successfully made after
two (2) years of operation, Grantor may choose to withdraw its net remaining funds.
7
Should the Fund be dissolved due to lack of usage , or for any other reason, the
Grantor, at its sole discretion, may direct that the Grantor Funds, which are not
currently loaned to businesses, be returned to the Grantor or be utilized by CEF in
funding other loan pools managed by CEF that benefit businesses in Weld County. In
the event of dissolution, Grantor Funds that are currently loaned to businesses will
stay with the Program until the business loan is paid as agreed or all reasonable
attempts have been made to recover delinquent loans. When a loan is paid in full or
recovered at a level considered complete by CEF in its reasonable judgment, the
Grantor, at its sole discretion, may direct that the Grantor Funds be returned to the
Grantor or to be utilized by CEF in funding other loan pools managed by CEF which
benefit businesses in Weld County. If the Grantor reasonably determines that the
Fund is being mismanaged, i.e. fraud, embezzlement, misappropriation of funds or
other such offenses, Grantor may choose to withdraw its net remaining funds. The
principal amount of proceeds from existing loans made from the Fund, if any, repaid
to CEF after the date of termination of participation by Grantor shall, subject to
proportional reductions or allocations described herein be promptly remitted to
Grantor. This provision shall survive termination of this Agreement.
M. Recordkeeping. CEF shall maintain reasonable records of its performance under this
Agreement and will allow access to these records upon reasonable notice during
normal business hours by the Grantor or its representative. These records will be kept
in CEF's office in Denver, Colorado.
N. Indemnification. CEF shall defend, indemnify and save harmless the Grantor from
and against all losses, claims, suits, judgments or liabilities incurred as a result of its
activities pursuant to this Agreement, and as part of such indemnification obligation
shall pay all costs and attorney's fees, if any, incurred by the Grantor as a result of any
such claims or suits.
G. No Agency. Nothing in this Agreement shall be deemed to create an agency,
partnership or employment relationship between the Grantor and CEF.
P. Complete Agreement; No Assignment; No Amendment. This document represents
the complete agreement between Grantor and CEF. Neither party shall assign or
transfer its interest in this Agreement without the written consent of the other. No
amendments or modifications shall be made to this Agreement unless it is in writing
and signed by both parties.
Q.
No Waiver of Immunity. No portion of this agreement shall be deemed to constitute a
waiver of any immunities the parties or their officers or employees may possess, nor
shall any portion of this agreement be deemed to have created a duty of care which
did not previously exist with respect to any person not a party to this agreement.
R. No Third Party Beneficiary Enforcement. It is expressly understood and agreed that
the enforcement of the terms and conditions of this agreement, and all rights of action
relating to such enforcement, shall be strictly reserved to the undersigned parties and
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nothing in this agreement shall give or allow any claim or right of action whatsoever
by any other person not included in this agreement. it is the express intention of the
undersigned parties that any entity other than the undersigned parties receiving
services or benefits under this agreement shall be an incidental beneficiary only.
This section is intentionally left blank.
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The parties have executed this Agreement as of the date first set forth above.
GRANTOR:
ATTEST: t ' \ow aaSa0:%%-S6-.14.—
Weld County Clerr to the Board
By:
Deputy CI to the Board
ATTEST:
By:
10
Board of County Commissioners of
Weld County
(�.
William F. Garcia, Chairman
JAN 2 8 2013
COLORADO ENTERPRISE FUND
By
President and CEO
WELD COUNTY ATTORNEY'S OFFICE
1150 O STREET
P.O. BOX 758
GREELEY, CO 80632-0758
WEBSITE: www.co.weld.co.us
PHONE: (970) 336-7235
FAX: (970) 352-0242
February 20, 2013
Ceyl Prinster
President and CEO
Colorado Enterprise Fund, Inc.
1888 Sherman Street, Suite 530
Denver, CO 80203
RE: Signed Original of Weld County Business
Loan Fund Grant Agreement
Dear Ms. Prinster:
Enclosed is a signed original of the Weld County Business Loan Fund Grant Agreement,
approved and signed January 28, 2013.
Please call me at (970) 356-4000, extension 4390, if you have any questions or need additional
information.
Sincerely,
`i'
ce T. Barker
Weld County Attorney
Enclosure
pc: Monica Mika, Director of Finance and Administration
Esther Gesick, Deputy Clerk to the Board
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