Healthy Food Enterprise Microlending Intermediaries Los Angeles County. Proposal Guidelines

Transcription

1 Healthy Food Enterprise Microlending Intermediaries Los Angeles County Proposal Guidelines I. OVERVIEW The California FreshWorks Fund (FreshWorks) is announcing the availability of $137,500 in loan capital, as well as technical assistance resources, for qualified intermediaries to support microlending to healthy food enterprises that reach families with small children throughout Los Angeles County. Earlier this year, FreshWorks deployed over $2MM in capital into lending intermediaries serving Los Angeles communities. This RFP is to deploy the program s remaining capital. The Food Enterprise Microlending Intermediary (FEMI) program represents a joint investment of the FreshWorks Fund and First 5 Los Angeles. Healthy food enterprises include any producer, processor, distributor, or retailer of food inventory that includes a high percentage of perishable or healthy food. Targeted enterprises include, but are not limited to: small community markets; meat or fish stores; corner or discount stores; take-out restaurants; street vendors; mobile markets; farmers bringing goods to market; value-add processors; produce distributors, food vending machines; CSA networks; or other innovative forms of distribution or retail that focus on healthy food sales. In addition to direct lending, FreshWorks provides capital to qualified LA County intermediaries who are connected to their communities and capable of providing small bursts of capital to local healthy food entrepreneurs. Our investments are intended to improve the County s capacity to microlend and assist food enterprises as a means of increasing the diversity of healthy food distribution and retail outlets. We are particularly interested in increasing access to healthy foods for working class families with small children ages 0-5. II. ELIGIBLE APPLICANTS FreshWorks is seeking to invest in intermediaries who demonstrate the ability to recruit, capitalize, and support a pipeline of healthy food enterprises located in, or delivering healthy food to, underserved communities within LA County. 1

2 We are not seeking a specific type of intermediary. Eligible applicants may be forprofit entities (including but not limited to corporations, lending institutions, cooperatives, LLCs or partnerships), not-for-profit corporations (including but not limited to community development corporations, community development financial institutions, university departments, public health and/or food advocacy organizations), or public entities (including but not limited to counties and cities, public health or economic development departments, school districts, business improvement districts, or other public or quasi-public agencies). FEMI investees must demonstrate experience or interest in healthy food retailing and small business development, as well as capacity to successfully support food entrepreneurs in underserved areas of LA County. An ability to manage capital, assist businesses, and repay debt is required. FEMI investees must have a plan of how to support end-borrowers with direct technical assistance, both for general business consulting and food/retail-specific consulting, in order to increase the likelihood of sustainable business ventures. A network of resources will be made available by FreshWorks for those who do not possess in-house technical assistance capacity. FEMI investees must have a plan to assess end-borrowers for their potential to reach families with young children (ages 0-5). Consulting resources will be made available by FreshWorks for end-borrowers who require assistance in marketing to this customer segment. Intermediaries will be responsible for, and required to report upon, this connectivity as part of a post-program evaluation. III. FUNDING LEVELS FreshWorks seeks to award capital investments totaling a minimum of $137, 500, in the form of low-interest loans, to qualified applicants. Capital Investment Terms: Awardees will receive a loan, payable in three (3) to five (5) years, to the CA FreshWorks Fund. Each loan carries a fixed interest rate of 3.25%, which will accrue and be fully paid along with loan principal at maturity. Loan terms will depend upon the targeted borrowers and loan products being offered by intermediaries. Loans are full recourse to the awardee. Upon a finding of good performance, a partial loan forgiveness of 25% of the total capital investment may be issued by FreshWorks. 2

3 Technical Assistance: Awardees will also have access to a FreshWorks Technical Assistance Fund, specifically capitalized for this program. TA funds will be deployed to support end-users with direct technical assistance. Eligible TA uses include, but are not limited to, general business consulting (business planning, accounting, legal review, marketing) as well as food/retail consulting (food handling, procurement, permitting, etc.). IV. USE OF FUNDS Funds are to be used to finance business startups, expansions or conversions that result in increased healthy food offerings to underserved communities. Funded activities may include, but are not limited to: construction; equipment purchase; inventory purchase; permits and licenses; and working capital. Past a reasonable loan fee and/or rate spread, intermediaries shall not capitalize their internal program costs into end-borrower loans. Intermediary staff costs such as program overhead, in-house consulting, or other administrative costs are not approved uses of loan funds. Should intermediaries choose to deploy the funds as grants or forgiveable loans to end-users, such a use of funds is permitted. Regardless, the loan capital must be repaid by the intermediary to FreshWorks according to the terms of the loan agreement. Applicants are expected to finance enterprises located in, or supplying, underserved areas. These are areas defined as low/moderate income census tracts where there are limited outlets for fresh food, such as supermarkets. Enterprises should also be positioned to sell healthy foods to families with young children. FreshWorks can confirm whether enterprises sit within or serve an underserved area. There is no minimum size of a microloan to an end user. Each award should fund at least two (2) enterprises per $50,000 of loan award. To the extent possible, a pipeline of potential healthy food enterprises should be identified and submitted with an intermediary s proposal. V. PROPOSAL FORMAT Applications for this program are due by Friday, November 13, Below are the components of the application. Please note that intermediaries who have 3

4 already received funding from this program need not resubmit documents past the information noted below. A. Application Cover Letter B. Project Narrative Include a description of past and/or current small business food programs undertaken, applicant s model for deploying capital, and applicant s motivation for focusing on healthy food business enterprises. EXISTING BORROWERS: Only describe any changes to your model since your last application, and your progress in deploying the first round of capital. C. Team Description Provide a brief overview of your agency, partner agencies, and short bios of key staff or consultants who will assist in this effort. Please explain your team s technical capacities for this effort. EXISTING BORROWERS: Only list any changes in key staff since your last application. D. Enterprise Pipeline Submit a list and description of healthy food enterprises who are currently seeking financing from you, or whom you believe will be seeking financing, including business owner information, address, type of business, and track record. If current pipeline is not sufficient to deploy all FEMI funds, also describe what types of food enterprises you intend to target and how you expect to locate and market to them. EXISTING BORROWERS: In addition to a pipeline document, please submit a report on FreshWorks loans made including size, terms, and payment status. E. Finance Products and Repayment Plan If relending the FEMI funds, provide a description and terms of all proposed loan products to be funded with the investment. Describe your history and capacity in underwriting and servicing small business loans or grants. If you intend to grant the funds, explain how you intend to fundraise or otherwise repay the investment amount. EXISTING BORROWERS: Only describe any new or altered products since your last application. F. Operating Guidelines and Underwriting Policies and Procedures Provide applicant s current operating guidelines and policies and procedures as related to the underwriting process. EXISTING BORROWERS: Only submit any new or altered policies since your last application. G. Technical Assistance & Expected Outcomes Describe how you will provide technical assistance, supportive services, and/or other accountability measures to ensure deployment of capital and delivery of healthy product offerings to underserved communities. Describe expected program outcomes including how you will monitor foods enterprises. EXISTING BORROWERS: Only describe any changes in your services or expectations since your last application. H. Connections to Young Children Describe how you will assess enterprise applicants and encourage end-borrowers to market healthy offerings to families with children ages 0-5. EXISTING BORROWERS: Only describe any changes in your services or expectations since your last application. 4

5 I. Financials Applicant should submit three (3) years of past financial statements as well as year-to-date financials. EXISTING BORROWERS: Only submit YTD financials for 2015, if you submitted 12/31/2014 financials as part of your last closing. J. Organizational Documents - Certificate of Good Standing from the Secretary of State of the jurisdiction in which applicant was incorporated, a Certificate of Insurance evidencing the amounts and types of insurance coverage carried by applicant with respect to its business and operations, IRS Form W-9 (Request for Taxpayer Identification Number and Certification), and a copy of the letter received by applicant from the IRS evidencing applicant s tax-exempt status, if applicable. EXISTING BORROWERS: No submission necessary. K. Signature Authorization Form- Complete the Authorization Form provided. This form is required in order to verify signature authority to enter into contractual agreement with the California FreshWorks Fund. Applicants must submit one original form signed in blue ink. EXISTING BORROWERS: No submission necessary unless previous signatory lack authority now. Applications should be no more than five (5) pages, exclusive of attachments and any other supporting materials such as pipeline or financial information. VI. AWARDEE REQUIREMENTS All successful awardees must meet the following requirements. 1. Increase access to affordable, nutritious foods in Los Angeles County. 2. Explore ways of connecting healthy foods to families with young children. 3. Repay investment capital and interest at the end of loan term. 4. Collect basic data on enterprise activities, such as food products introduced, targeted customers, and financial performance over time. 5. Submit a final report. VII. SUBMITTING A PROPOSAL Please submit one (1) original and signed copy of your proposal by mail to: California FreshWorks Fund c/o Emerging Markets, Inc N. Orange Drive, Suite 120 Los Angeles, CA Attn: Daniel Tellalian Also, please submit one (1) copy of your proposal in PDF format via to: dtellalian@emergingmarkets.us 5

6 VIII. PRE-SUBMITTAL INFORMATION Interested applicants may contact Emerging Markets, Inc. via with basic questions about the program or application process. Primary points of contact are: Azusena Favela Daniel Tellalian For more in-depth queries, there will be two phone Q&A sessions taking place as follows: Phone Q&A #1 Friday, October 30, 2015 Conf # pm Pin # Phone Q&A #2 Friday, November 6, 2015 Conf # pm Pin # VIX. CALIFORNIA FRESHWORKS FUND FEMI-LA PARTNERS Capital Impact Partners is the fund administrator for the California FreshWorks Fund. Capital Impact Partners transforms underserved communities into strong, vibrant places of opportunity for people at every stage of life, delivering strategic financing, incubating new social programs, and providing capacity building to help ensure that low-to-moderate-income individuals have access to quality health care and education, healthy foods, affordable housing, and the ability to age with dignity. A nonprofit Community Development Financial Institution, Capital Impact Partners has disbursed more than $2 billion to revitalize communities over the last 30 years. Headquartered in Arlington, Va., Capital Impact Partners operates nationally, with local offices in Detroit, Mich., and Oakland, Calif. Capital Impact Partners is a capital investor in the FEMI-LA program, as well as the lender to intermediaries. Learn more at First 5 Los Angeles (F5LA) is an early childhood advocate working collaboratively across L.A. County. F5LA was created in 1998 to invest L.A. County s allocation of funds from California s Proposition 10 tobacco tax. Since then, First 5 LA has invested more than $1.2 billion in efforts aimed at providing the best start for children from prenatal to age 5 and their families. F5LA is a grant investor in the FEMI-LA program. Emerging Markets, Inc. is the Fund s food access organization, responsible for statewide outreach and education, applicant origination, and pipeline development. The firm is also the programmatic lead on the Food Enterprise Microlending Intermediary (FEMI) program in Los Angeles County. 6