Department of Business & Economic Development

Transcription

1 Department of Business & Economic Development

2 Life Cycle Assistance Capital Investment Investment Financing Group Small Business MSBDFA Incentives MEDAAF Sunny Day Guaranties and Credit Enhancements MIDFA 2

3 Maryland Venture Fund DBED s Investment Financing Group provides emerging high-technology business with access to early-stage capital through the: Challenge Investment Program; Enterprise Investment Program; MD Enterprises Venture Capital Limited Partnership Investments and administration of the Maryland Venture Capital Trust. The 2012 Invest Maryland initiative will raise $84 million of state funding of equity investments that will leverage private capital.

4 Maryland Venture Fund The Challenge Investment Program (CIP) Seed funding for start-up technology companies to cover some of the initial costs associated with bringing a product to market. Focused on biotechnology, information technology, telecommunications, software, cyber security and advanced materials. Grants of $50,000 to $100,000 Since investments = $12.2 million

5 Maryland Venture Fund The Enterprise Investment Program (EIP) Direct equity investments in emerging high technology companies that have a patented or proprietary products, manufacturing processes and a marketing strategy in place. Investments range from $150,000 to $500,000 leveraging a minimum 3:1 private sector match. Maintain principal place of business in Maryland Since ventures = $60 million 25 exits = $71 million return

6 aryland mall usiness evelopment inancing uthority Created in 1980 to provide financing assistance to promote the viability and expansion of small businesses owned by socially or economically disadvantaged persons that do not meet traditional credit criteria 859 transactions exceeding $190 million 84% of $24 million portfolio is to underserved Operated by Meridian Management Group

7 1. Contract Financing: Direct loans or guarantee of up to $2 million for working capital and equipment to begin, continue and complete contracts which receive the majority of their funding (51% or more) from any federal, state, or local government agency, or utility regulated by the Maryland Public Service Commission. 2. Guaranty Fund: Conventional deficiency loan guarantee of up to 80% not to exceed $2 million or interest rate subsidy of up to 4%. Eligibility includes real estate, equipment, FF&E, and working capital.

8 3. Surety Bond Program: Issuance of bid, performance, and payment bonds up to $5 million for contracts which receive the majority of their funds (51% or more) from any federal, state, or local government agencies or utilities regulated by the Maryland Public Service Commission. May also guarantee up to 90% of a surety s bond. 4. Equity Participation Investment Program: Direct loans, loan guarantees, and equity investments of up to $2 million for business acquisitions, franchising, and developing technology-based companies. Investments are limited to 49% of the appraised valuation.

9 Maryland Industrial Development Financing Authority (MIDFA) Created in 1965 to encourage the public / private partnership in economic development projects Completed 884 loans and bonds exceeding $2.6 billion. Fund balance is over $39 million dollars Statutory leverage of 5:1 = $195 million program capacity Projects must be located in a Priority Funding Area MIDFA capabilities to encourage economic development: Guaranty / Insurance of Commercial obligations Premium of ½% per annum of insured portion Issuance of Tax-exempt and Taxable bonds Issuance fee of 1/8% per annum of principal May also be insured

10 Maryland Industrial Development Financing Authority Conventional obligation may be insured up to 80% not to exceed $2.5 million. Typically ranges 20% to 50%. Rapid Response approvals up to $250,000 in 24 hours. MIDFA issued Tax-exempt, Taxable and Energy related bonds can be insured up to $7.5 million not to exceed 100% of the bond. Tax-exempt bonds may finance manufacturing, 501(c)(3) non profits, solid waste recovery and certain private activity port related projects.

11 MD Economic Development MEDAAF Assistance Authority and Fund Project must be in a Priority Funding Area. 1. Significant Strategic Economic Development 2. Local Economic Development Opportunities. 3. Direct Assistance to Local Jurisdictions or MEDCO. 4. Regional or Local Revolving Loan Funds. 5. Special Purpose Loans.

12 MEDAAF Significant Economic Development Opportunities Continued Interest: Target Rate of 3% per annum. Rates of less than 3% may be considered if the project is located in an area of high unemployment as defined by the Department, or if the Department determines that the project is a compelling economic development initiative. May be deferred or waived for first 2 years. Since 2000 the program has completed 496 transactions totaling $223 million. Loan Terms: Real Estate Machinery & Equipment Furniture & Fixtures Working Capital Line Up to 25 years Up to useful life of asset NTE 15 years Up to useful life of asset NTE 15 years Renewed annually with a 3 year cap

13 MEDAAF Local Economic Development Opportunities Continued Forms of Financing: Loans Conditional Loans/Grants Grants Investments (in conjunction with a loan or grant) Maximum Participation: Loans up to $5 million. Grants and conditional loans/grants up to $2 million.

14 Economic Sunny Development Day Opportunities Extraordinary economic development opportunities resulting in significant high wage employment and high capital investment by a prominent company. Must be at least investment grade credit risk with proven access to an alternative funding. Recipients must provide a minimum capital investment of at least 5 times the amount of the assistance. Assistance may be repayable loans and forgivable loans. Individual projects range up to $8.5 million over multiple years. To date there have been 121 transactions totaling $180 million. 14