APPLICATION PACKAGE. New Orleans Small Business Assistance Fund PROGRAM PARTNERS HOW TO APPLY KEY DATES APPLICATION PACKAGE CONTENT

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1 PROGRAM PARTNERS New Orleans Small Business Assistance Fund APPLICATION PACKAGE The Small Business Assistance Fund (SBAF) is a new financing program created in partnership with the City of New Orleans and NewCorp, Inc. (NewCorp), to support the growth of new and existing businesses. By providing access to capital, SBAF will encourage small business inclusion and job creation. This $2 million fund provides 8% interest rate loans to for-profit and not-forprofit businesses for operating capital and equipment purchases. SBAF loans will range from $10,000 to $100,000. The maximum length of the term loan is up to 84 months and will depend on the financing need/use of funds of the borrower. NewCorp is a Community Development Financial Institution (CDFI) dedicated to addressing the need for capital access to small businesses by providing a variety of financial products and related services. Since 1995, NewCorp has provided over $15 million in financing products for the small business community, generating over 5,000 jobs. NewCorp is a seasoned lender, economic development technical assistance agent and a valuable resource. APPLICATION PACKAGE CONTENT Program Overview & 1-3 Eligibility Checklist Frequently Asked Questions 4-6 Application 7-10 Required Document Checklist 11 City of New Orleans Tax 12 Clearance Authorization SBAF is partially funded by the City of New Orleans Economic Development Fund. HOW TO APPLY To find out if you are eligible for the SBAF, download the application from Complete the eligibility application and submit your form with attachments by , fax or mail to: NewCorp, Inc St. Bernard Avenue New Orleans, LA FAX: sbaf@newcorpinc.com (Office hours M-F: 9:00 am-4:00 pm) Have questions about the application process? Call or sbaf@newcorpinc.com for assistance. KEY DATES Application Period Begins October 1, 2012 Application Deadline October 31, 2012 Program Eligibility Notification December 1, 2012 Loan Eligibility Notification January 1, 2013 Due Diligence/Interview Period January February 2013 Final Loan Commitment Letters March 2013 Loan Closings March April 2013

2 New Orleans Small Business Assistance Fund OVERVIEW Applying for financing from the Small Business Assistance Fund will requires several steps in the process. First, the applicant must complete this application to determine whether the proposed project is consistent with the goals and objectives of the program. Once a project s eligibility is determined, the applicant will receive a letter disclosing its eligibility status. Eligible applicants will move forward in the underwriting process and evaluated to determine business viability and if applicants meet the minimum standard underwriting criteria. NewCorp will conduct a site visit and interview with the applicant before making a loan approval. PROGRAM ELIGIBILITY Applicants must complete the SBAF application. NewCorp, Inc. will review each application to determine if the proposed project meets the eligibility criteria: For Profit or Not-for-Profit business (income generating only) Located in the City of New Orleans Demonstrate inability to access capital from traditional lending sources Demonstrate financial and economic viability (based on financial history or business plans) Provide living-wage employment and ownership opportunities to low-to-moderate income communities LOW MODERATE INCOME (LMI) CRITERION A business will be deemed to meet the LMI criterion if located within a census tract OR service area where at least 51 percent of persons or households are low to moderate income. A business will be deemed eligible if it satisfactorily shows it creates or retains permanent jobs, at least 51 percent of which (computed on a full-time equivalent basis) will be made to or held by LMI persons. LOAN AMOUNTS Loan amounts will range from $10,000-$100,000. INTEREST-BEARING LOANS Interest rate for the SBAF Program is 8%. The length of the loan term will depend on the financing needs/use of funds of the borrower. Program Partners: Page 1 of 14

3 ELIGIBLE USE OF FUNDS Operating Capital Equipment Purchases INELIGIBLE USE OF FUNDS Refinancing existing debt Payment of any tax arranges, government fines or penalties Political or religious activities Buying out any stockholder or equity holder in the borrower s business Buying out or reimbursing any family member Purchasing instruments or investments for the sole purpose of a return on investment. APPLICATION PROCESS AND ELIGIBILITY EVALUATION In order to determine eligibility, the applicant must complete the Small Business Assistance Fund application. NewCorp will review each application to determine whether the proposed project meets the eligibility criteria listed above. If an applicant is deemed program eligible, the applicant will receive written confirmation by December 1, UNDERWRITING PROCESS AND EVALUATION After the applicants have been found to meet the minimum program eligibility criteria, the applicant will move forward to the underwriting process. Applications will be evaluated by NewCorp s Credit Analysis Department primarily to determine business viability, debt repayment capacity and the impact of the loan funds on business sustainability and growth. In order to be eligible to receive financing under the SBAF Program, the applicant must satisfy the following minimum standard underwriting criteria: Determination that the applicants use of funds meet general program eligibility criteria Beacon score > 550 for all principal and guarantors Business debt coverage ratio of 1.10 to-1.00 (Business Cash Flow divided by Annual Debt) Personal debt coverage Ratio of Maximum 50% (Annual Debt divided by Gross Personal Income) Personal Guarantee (owners of more than 10% of business) No prior history of bankruptcy at any time with the business nor recent (within the last seven years) for the principals DUE DILIGENCE/INTERVIEW PROCESS During the due diligence process, NewCorp will conduct a site visit and interview with all applicant qualified to receive loan funds. The application will be evaluated to determine the effectiveness of the loan request with respect to the use of the loan funds, its impact on the business relative to growth, employment and other factors, which would improve the financial viability of the business. As a result of the due diligence findings, NewCorp reserves the right to determine final loan amounts which may be lower than amount requested, to comply with underwriting standards and funding pool limitations. Page 2 of 14

4 FINAL RECOMMENDATIONS AND LOAN APPROVAL AMOUNTS Applicants will receive final loan commitment letters with loan approval amounts explaining the terms and conditions of the loan by March 1, The commitment letter must be signed and returned within 10 days of the date of the commitment letter or the offer may be withdrawn. LOAN CLOSING Once NewCorp has received the signed commitment letter, loan closing will be scheduled within 10 days of receipt. All loans will be closed by April 30, PROGRAM INQUIRIES Visit for program information and to download the SBAF Program Application. All programs inquiries should be addressed directly to NewCorp. CONTACT INFORMATION: NewCorp, Inc St. Bernard Avenue New Orleans, LA (P) (F) Page 3 of 14

5 New Orleans Small Business Assistance Fund FREQUENTLY ASKED QUESTIONS Are grant dollars available with this program? No. The program includes only loan dollars. What happens if the total of loans approved exceeds the $2 million? Every attempt will be made to provide a loan to every approved loan applicant. However, should the amount of approved loans exceed the $2 million fund, smaller loans will be approved to allow as many borrowers to receive funding as possible. Additionally, NewCorp may consider any unfunded loan approvals with other sources of funds, but there is no guarantee that additional funds will be available and there is no guarantee that loans from other sources will contain the same terms and conditions as the SBAF program. Is my business required to be a DBE to be approved for a loan? No. All businesses will be considered for the loan program, subject to program eligibility requirements. What if my business is located in another parish, but does business in and hires people from New Orleans? The SBAF program is designed for businesses domiciled in the City of New Orleans. Will my loan be approved or reviewed by City Officials? No. The loans will be reviewed and approved by a Loan Committee formed by NewCorp. The City will be provided with periodic status reports. What if I can only provide one or two years of business tax returns? What is required if my business is a start-up? Businesses are required to provide three years of tax returns to demonstrate historical economic viability. The lack of such data may present a challenge to demonstrate viability, but reasonable financial projections, internally prepared financial statements and/or bank statements may be used as secondary options. If the business is new or has no financial history, business plans with financial projections are required to be submitted with the loan application. Program Partners: Page 4 of 14

6 What if my business is a home-based business? Will a site visit still be required? Home-based businesses are eligible for the SBAF program and site-visits are required. Home-based business owners are required to prepare their homes for the visit by clearly demonstrating a work site/office in an easily accessible, common-area of the home. Household pets and other personal items should be removed during the brief visit. Will I be required to have collateral? Based on the use of the loan proceeds, collateral may be required, but will not be required for every loan. Personal guarantees will be required for all for-profit business loans. How can the loan funds be used? Am I required to spend the money only in New Orleans? Loan funds may only be used for operating expenses and to purchase equipment/supplies. Operating expenses may include payroll, insurance, advertising, professional services, etc. While we strongly encourage the expenditure of loan funds in the City of New Orleans, there is no compliance requirement to do so. Are loan terms negotiable? Yes, the length of the loan term is negotiable and will depend on the use of funds of the borrower. Maximum term loan is up to 84 months. Are there any loan fees? Can the interest rate be lowered? No, there are no loan fees. No, the 8% rate cannot be changed. Are personal guarantees required for non-profit business loans? No. However, a properly executed/approved loan resolution from the non-profit s Board of Directors is required. In lieu of personal guarantees, collateral may be considered for non-profit loans. Are there any other compliance requirements after receipt of the loan? The objective of the SBAF program is to financially support economically viable business enterprises. To measure the achievement of this objective, businesses are required to comply with the following measurable metrics: Businesses must be open and operating 12 months after loan funding Business must hire and/or retain up to two (2) new low-to-moderate income employees What happens if I go out of business or my business fails before I repay the loan? The underwriting process evaluates the likelihood of business failure and the adequacy of loan repayment capacity. While we do not plan for business failures, we recognize that business failures occur. When businesses fail before loans are repaid, the owners/personal guarantors of the loan are expected to Page 5 of 14

7 continue to repay the loan with personal or other sources. Should owners fail to make payments, NewCorp will pursue all legal means to recover the loan investment, including seizing items pledged as collateral, filing liens and judgments against owners/guarantors, reporting derogatory status to credit reporting agencies and seeking garnishments of personal income/accounts. Will there be any chance that loans will be forgiven or converted to a grant at a later date? No. All loans must be fully repaid in accordance to the terms and conditions stipulated in the SBAF program and the loan documents signed at loan closing. Am I required to have Technical Assistance? How much will it cost? No. Technical Assistance is designed to fill resource voids in business capacity. Should a business demonstrate that it has adequate capacity relative to management, fiscal, risk-management, legal, marketing and technology resources, Technical Assistance services will not be recommended. However, should a business be assessed to be in need of such services, arrangements will be made to provide the services by NewCorp, its collaborative partners or by referral to paid vendors. Page 6 of 14

8 SMALL BUSINESS ASSISTANCE FUND APPLICATIONNESS Applicant must complete this Small Business Assistance Fund Application to determine whether the business meets the eligibility requirements of the program. ASSIS 1. Applicant Information Legal Name of Individual Tax ID or SSN: Application Date: Company Name: Date of Establishment: d/b/a, if applicable: Website: Company Address: Check organization type: S-Corporation C-Corporation Sole Proprietorship Partnership LLC 501(c) 3 Other: Home Address: Work Phone: Cell Phone: Program Partners: Page 7 of 14

9 2. Company Information Please select the industry in which your business operates: Administrative Arts/Entertainment Construction Educational Services Finance/Insurance Food Service Health Care and Social Services Information/Publishing Manufacturing Professional Services Real Estate Recreation/Tourism Retail Trade Technical Services Transportation/Warehousing Utilities Wholesale Trade/Distribution Other: 3. Please briefly describe the products or services your business offers. 4. Please list the size of the company over the past 3 years in terms of number of employees. This includes salaried, hourly, and contractors. Current Number of Employees # Part-Time Employees # Full-Time Employees Proposed Additional # of Employees # Part-Time Employees # Full-Time Employees 5. Are you certified by any of the following programs? (Please check all that apply) MBE-Minority Owned Business Enterprise WBE- Women Business Enterprise Other: DVBE- Disadvantaged Veteran Business Enterprise SLDBE- State and Local Disadvantaged Business Enterprise 6. a) Do you have a formal, written business plan? Yes No b) If you have a business plan, when was it last updated? 7. Have you previously applied for funding/capital from a bank, credit union or other source? Yes No a) If you did not receive funding, what was the reason cited by the capital provider? Page 8 of 14

10 *Please provide written documentation, if available. 8. Financing Information Total Amount Requested: Applicant Proposes to use the award for the following purpose: Working Capital: $ Inventory: $ Equipment: $ 9. Ownership Information Management (includes proprietor, partners, directors, all holders of outstanding stock Name, SSN, Title Complete Address Ownership ff (%) U.S 22Citizen Race Sex *100% of ownership must be shown; use separate sheet if necessary. Please answer the following questions: 10. Are you or your business involved in any pending lawsuits? (If yes, attach explanation.) Yes No 11. Have you or any officer of your company been involved in bankruptcy or insolvency proceedings? (If yes, please provide details.) Yes No 12. How or where did you hear about this program? Page 9 of 14

11 Certification and Authorization In connection with the application process for the Small Business Assistance Fund Program: 1. I confirm that the information provided in my application and supporting documents is accurate to the best of my knowledge. I understand that if I have deliberately provided false information or fail to meet the terms of the program, I forfeit any opportunity to be considered for, and to participate in the program. 2. I hereby certify: (i) I am not currently the subject of a pending criminal proceeding and have never been arrested or convicted in a criminal proceeding (including cases that have been sealed or expunged); ii) I am lawfully residing in the United States; and (iii) I am not (either as an individual or general partner of a partnership or executive officer of a corporation) the subject of any federal or state bankruptcy or insolvency proceedings. 3. I hereby authorize NewCorp, Inc. to verify information presented here and on my application and to procure a consumer report for that purpose. I understand that information produced from this verification and report may contain information about my background, character, and credit history. I hereby release all persons or entities, including NewCorp, Inc., from liability arising from requesting or supplying such information. 4. I acknowledge that I am applying for the City of New Orleans Small Business Assistance Fund program: Borrower/Applicant Authorized Signatory Title Date Page 10 of 14

12 SUBMISSION INSTRUCTIONS There are several ways to submit your completed application to NewCorp: By By mail or hand: NewCorp, Inc St. Bernard Avenue New Orleans, LA (Office hours M-F: 9:00 am-4:00 pm) Please call with any questions DOCUMENTATION CHECKLIST Please submit in the following order: Completed Loan Application Comprehensive Business Plan (required for Start-Up businesses only) Project Description/Need for Funding: Please submit a brief narrative that includes an explanation of how you intend to use the requested funding. The most recent copies of all owners resumes Verification of personal and business financial information (including copies of each of the following): Last 3 years of Business Tax Returns Last 3 years of Personal Tax Returns (for all owners/ guarantors) Business Financial Statement as of last quarter ended Schedule of Existing Business Debts Copy of owners driver s licenses, state or national ID, or passports City of New Orleans Tax Clearance Division *Other information may be requested based on application or financial information Page 11 of 14

13 CITY OF NEW ORLEANS TAX CLEARANCE AUTHORIZATION According to Section 2-8 of the Code of the City of New Orleans, Louisiana 1995, the City may not enter into or make payments under a contract, grant or cooperative endeavor agreement with any person, corporation, or entity delinquent in City taxes. This form supplies the needed tax clearance. This clearance is issued without prejudice to any tax liabilities discovered by audit. Please refer to the instructions on the back of this form BUSINESS NAME: OWNER S NAME: REAL ESTATE TAX NUMBER: TYPE OF BUSINESS: BUSINESS ADDRESS: MAILING ADDRESS: PERSONAL PROPERTY TAX NUMBER: CONTACT TELEPHONE: FAX NUMBER: SALES TAX/OCCUPATIONAL LICENSE NUMBER: ADDRESS: PRINT NAME: TITLE: AUTHORIZED SIGNATURE: DATE SIGNED: I certify that I have the authority to execute this form with respect to the tax matters covered and that the above is true and correct. The City of New Orleans is authorized to inspect and/or receive confidential tax information. BUREAU OF REVENUE (Room 1W15) BUREAU OF TREASURY (Room 1W37) This clearance covers Occupational License and This clearance covers Ad Valorem taxes for Real Sales/Use taxes. Estate and Business Property taxes. I hereby assert that after review of the taxpayer s I hereby assert that after review of the taxpayer s records of this date that the taxpayer IS NOT delinquent records of this date that the taxpayer IS NOT in any taxes owed to the city. This clearance covers the delinquent in any taxes owed to the city. This period today through March 1, 20. The above clearance covers the period today through clearance may be revoked for failure to pay sales tax. March 1, 20. COLLECTOR OF REVENUE DATE TREASURY CHIEF DATE I attest that the taxpayer named above is not delinquent in any taxes owed to the city. DIRECTOR OF FINANCE DATE Page 12 of 14

14 CITY OF NEW ORLEANS TAX CLEARANCE AUTHORIZATION INSTRUCTIONS 1. To complete this form, provide all of the information requested. Failure to fill in ALL information requested will delay processing. If the form is not signed and dated, the form will not be processed. 2. Complete, sign and date the authorization form and submit to the Department with whom you are contracting. 3. This form authorizes the City of New Orleans to inspect and/or receive your confidential tax information. 4. This Tax Clearance Authorization will not be honored for any purpose other than contracting with the City of New Orleans. 5. The following requirements must be met in order for a Tax Clearance Authorization form to be approved by the City of New Orleans. It is recommended that all outstanding tax and business registration be completed prior to processing the form to expedite contract execution. Real Estate/Personal Property Tax o Businesses are required to be current in payment of all Real Estate Tax and Personal Property Tax. o A business can visit the City of New Orleans website, at the Bureau of Treasury webpage to pay outstanding Real Estate and Personal Property taxes due. o A business can mail outstanding tax payments to City of New Orleans, Bureau of the Treasury 1300 Perdido St., Room 1W38, New Orleans, La Sales Tax/Occupational License o All businesses are required to have a City of New Orleans Sales Tax number. o If the business is located within Orleans Parish, an Occupational License is also required. If the business is domiciled outside of Orleans Parish, a registration is required to be completed to obtain a Revenue account number. o If a business is not registered, a New Business Application must be completed. The application can be found on the City of New Orleans website, at the Bureau of Revenue webpage. Under Online Revenue Documents, an application can be downloaded and returned to the City of New Orleans, Bureau of Revenue, 1300 Perdido St., Room 1W15, New Orleans, LA Any questions may be forwarded to Revenue Administration, or o Non-profit organizations must comply with the Occupational License requirements by completing a New Business Application. The application can be found on the City of New Orleans website, at the Bureau of Revenue webpage. Under Online Revenue Documents, an application can be downloaded and returned to the City of New Orleans, Bureau of Revenue, 1300 Perdido St., Room 1W15, New Orleans, LA Any questions may be forwarded to Revenue Administration, or o Once exempt status is confirmed for the non-profit organization, the organization is exempt from Occupational License fees. Page 13 of 14