Quarterly Newsletter, Issue 8, March 2015

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1 CCD Business Development Corporation A Certified Development Company Quarterly Newsletter, Issue 8, March 2015 An SBA 504 loan is a partnership between a Certified Development Company (CDC), the Small Business Administration and a lender. CDCs are economic development organizations that have been certified by the SBA to make loans under the Certified Development Company Economic Development Loan Program through an SBA 504 loan. Working with a lender, the CDC provides up to 40% of the financing for commercial real estate purchase and new construction with an SBA 504 loan. A lender must partner with the CDC and typically provides 50% of the financing, while the entrepreneur ends up paying as little as 10% down. The CDC works closely with the small business borrower to process, approve, close and service the SBA 504 loan. Funding is provided by the CDC issuing a 10 or 20 year debenture bond that is sold to investors on Wall Street giving entrepreneurs access to capital at low, fixed interest rates. 1 February 2015 Rate 4.55% Effective rate includes principal & interest, program fees, and loan loss subsidy. CCD Business Development Corporation would like you to choose us as your Certified Development Company! Certified Development Companies: Growing Small Businesses, Jobs, Communities WELCOME! Eileen Ophus, Executive Director/CEO CCD Business Development Corporation had a change in leadership. The Board choose Eileen Ophus to succeed Wayne Luzier, who retired December 31, Eileen worked for CCD for 14 years as the Community Development Director. Ophus is a graduate of Montana State University Bozeman with a Bachelor of Science in Business/Accounting. As the Community Development Director at CCD, she expanded the Community Development Department accumulating many CDBG, USDA RUS and EDA projects in the region. She is well-known in the tri-county area and says she is excited to join the staff and become involved in the marketing of CCD s loan programs and the community development projects. Eileen Ophus can be reached at: or Toll Free at e.ophus@ccdbusiness.org CCD Provides Project Development Services to Local Communities! In the most recent IFA CDBG award cycle, CCD assisted two local projects in receiving funding for projects. Curry County Head Start: Curry County was awarded a CDBG Grant for $1,641,163, which will allow the Head Start program in Brookings to acquire and renovate a facility to house their Head Start program. Head Start serves low income children ages 3-5 and their families. City of Yoncalla Wastewater Treatment Plant: The City of Yoncalla received a grant for $2,389,000 to construct a new Wastewater Treatment Plant. Upcoming Projects: Pelican Bay/Harbor Water Systems Consolidation Project: CCD is assisting these two systems to complete funding applications to consolidate the systems, improving services for residents within the districts. Lakeside Water District Water Master Plan: CCD is working with the Lakeside Water District to complete funding applications to support updating their Water Master Plan. The Oregon Health Authority requires that Water Districts update their Water Master Plan every 20 years. Dora Sitkum Fire Vehicle Garage: CCD is assisting the Dora Sitkum Fire District in preliminary project development for a vehicle garage for emergency vehicles in Sitkum. This project will help to ensure that residents in Sitkum have access to emergency vehicles in the event of a road closure due to landslide or inclement weather. Proposed site for Vehicle Garage OUR MISSION: To create a climate that encourages economic development that will retain existing jobs, create new jobs, diversify local economies, support existing industry and enhance the quality of life for the regions residents, as well as, providing an atmosphere for personal growth.

2 Finding a Business Mentor In the first months of opening your business, you ll need to make many important decisions. But you don t have to make every decision on your own. Ultimately, you re responsible for your business, but you can always consult a mentor for advice. What is a mentor? A mentor is someone who has been down the same path you re taking. He or she is experienced, successful and willing to provide advice and guidance for no real personal gain. Here are some steps for finding and working with a mentor for your new small business venture. 1. Government-Sponsored Mentor Organizations The government offers a great deal of free resources and services to support small business owners, both online and in person: SCORE Mentors: Sponsored by SBA, SCORE provides free and confidential counseling, mentoring and advice to small business owners nationwide via a network of business executives, leaders and volunteers. You can connect with a SCORE volunteer through in-person and/or on online counseling. Small Business Development Centers: SBDCs provide management assistance to current and prospective small business owners. SBDC services include financial counseling, marketing advice and management guidance. Some SBDCs provide specialized assistance with information technology, exporting or manufacturing. SBDCs are partnerships primarily between the government and colleges, administered by SBA. Women s Business Centers: WBCs provides business training and counseling with the unique needs of women entrepreneurs in mind. WBCs are a national network of nearly 100 educational centers designed to support women who want to start and grow small businesses. Veteran s Business Outreach Centers: VBOCs provide veterans with entrepreneurial development services such as business training, counseling and mentoring. 2. Trade Associations Many trade associations operate mentor-protégé programs that provide guidance to help you build a business. These mentoring programs are often conducted through a combination of formal one-on-one mentoring sessions and group networking with fellow protégés. 3. Mentoring for Government Contractors If your business plans to sell products and services to the federal government, you may need specialized mentorship. The General Services Administration (GSA) offers a Mentor-Protégé Program that is specifically designed to encourage prime contractors to help small businesses participate in government contracting. The SBA also has a Mentor-Protégé Program for small businesses. 4. Look to Your Network Who do you know? Do you have a previous boss who inspired you or a friend who is a successful business owner? Ask that person to be your mentor, and learn from his or her advice and best practices. Just be prepared to share with them why you chose them in particular, your goals and what you are looking for from them. 5. Working with a Mentor If you decide to work with a mentoring organization, ensure there is a formal mentor-protégé structure in place. If you work with an individual, you ll need to establish a mutually beneficial, structured relationship. Remember these tips about mentoring: Be organized, prepared and consistent. Make sure you are respectful of your mentor s time. Do not expect your mentor to run your business for you or make decisions for you. You should have realistic expectations about what a mentor can provide you. Plan your mentoring sessions in advance. These could be a simple as having a one-on-one meeting once a month to discuss business goals, obstacles and regulatory requirements that you don t understand. Take notes, create action items and be prepared to review progress during your next session. What are the main reasons small businesses seek financing? Small businesses borrow for four principal reasons: 1) starting a business, 2) purchasing inventory, 3) expanding the business, and 4) strengthening the firm. Firms choose different means of financing depending on the intended purpose. Remember: CCD Business Development Corporation has programs available to meet your financing needs. Many of life s failures are people who did not realize how close they were to success when they gave up - Thomas Edison 2

3 What is an SBA loan? SBA Loans Explained A 101 for Small Business Owners SBA doesn t make direct loans to entrepreneurs to start or grow a business. Instead, it provides a guarantee to banks and lenders for the money they lend to small business owners. This guarantee protects the lenders interests by promising to pay a portion of the loan back if the business owner defaults on the loan. So when a business applies for an SBA loan, it is actually applying for a commercial loan through a bank or authorized SBA lender, structured according to SBA requirements with an SBA guarantee. Essentially, SBA loans alleviate the risk associated with lending money to business owners who may not qualify for traditional loans. What types of loans are available? There are several types of loans that business can take advantage of, each developed to suit the needs of your business. The 7(a) loan program can be used for a number of purposes including working capital, revolving funds, equipment purchases, refinance existing debt and more. SBA also offers export-assistance loans, as well as, financing for seasonal working capital (CAPLine) or major fixed-assets such as equipment or real estate (SBA 504 Loans, which is what CCD Business Development Corporation offers as a Certified Development Company.) In addition, SBA can help business owners in need of financing to help with disaster recovery. Disaster loans available to homeowners, renters, businesses of all sizes and private, nonprofit organizations can be used to repair or replace items that have been damaged or destroyed in a declared disaster including, real estate, personal property, machinery and equipment and inventory and business assets. If you are looking for smaller loan amounts (under $50,000), consider the Microloan program or the SBA Express program. SBA Express is designed for businesses with financing needs up to $350,000. The proceeds can be used to finance a variety of business activities and no collateral is required for loans up to $25,000. Is my business eligible for a loan? While each loan has its own specific qualification criteria, talk to your bank or lender about your needs and business profile. Take note, in addition to meeting SBA requirements, lenders will also take into consideration credit factors such as your business cash flow, equity investment, collateral, etc. How do I apply for an SBA loan? While each SBA loan program has its own eligibility criteria and application process, which you ll work through with your lender. Featured SBA 504 Loan Project JK Timm, LLC Jeffrey W. Timm, DMD Timm Family Dentistry 375 NE Emerson Ave. Bend, OR (541) For three generations, families in the Bend, Oregon area have put their trust in Timm Family Dentistry. The Timms have built a reputation for their gentle and friendly chairside manner and their dedication to providing a broad scope of dental services. FOR LENDERS: Choose a loan for both Borrowers and Lenders The SBA 504 loan offers benefits to both borrowers and lenders. The loan s shared financing structure reduces risk for lenders, and its low down payment and long-term, low fixed interest rate puts financing within reach for businesses that may not qualify for conventional loans. Benefits to lenders Low loan-to-value, typically 50 percent Lower reserve requirement Reduced credit risk through partnership funding CCD prepares the SBA paperwork 3 Together We re Building The Future Through Responsible Economic Development

4 Featured CCD RLF Loan Project TechBuilt, Inc. (Borrower) 164 N. Oak Sutherlin, OR (541) TechBuilt, Inc. was chartered in It has been a successful small company from the beginning and has been active in the community. The business has created many jobs over the years. Services: -Manufacturing of trusses; -Selling of building supplies to contractors and the general public; -Build and export roof trusses to Japan. DID YOU KNOW? The SBA is not your only source for small business loans. State and local economic development agencies as well as numerous nonprofit organizations provide low-interest loans to small business owners who may not qualify for traditional commercial loans. This information will help to ensure that you are prepared when you decide to apply for a small business loan. Documentation Needed for Small Business Loan Applications While every loan program has specific forms you need to fill out and documents you need to submit, you will likely need to submit much of the same information for different loan packages. Before you start applying for loans, you should get some basic documentation together. The following are typical items that will be required for any small business loan application: Personal Background: Either as part of the loan application or as a separate document, you will probably be asked to provide some personal background information, including previous addresses, criminal record, educational background, etc. Resumes: Some lenders require evidence of management for business experience, particularly for loans that are intended to be used to start a new business. Business Plan: All loan programs require a sound business plan to be submitted with the loan application. The business plan should include a complete set of projected financial statements, including profit and loss, cash flow and a balance sheet. Income Tax Returns: Most loan programs require applicants to submit personal and business income tax returns for the previous 3 years. Financial Statements: Many loan programs require owners with more than a 20 percent ownership in the business to submit a signed personal financial statement. Collateral: Collateral requirements vary greatly. Some loan programs do not require collateral. Loans involving higher risk factors for default require substantial collateral. It is a good idea to prepare a collateral document that describes cost/value of personal or business property that will be used to secure a loan. Legal Documents: Depending on a loan s specific requirements, your lender may require you to submit one or more legal documents. Make sure you have the following items in order, if applicable: -Business licenses and registrations required for you to conduct business -Entity Documents (Articles of Incorporation, etc.) -Copies of contracts you have with any third parties -Franchise Agreements -Commercial Leases Questions Your Lender Will Ask You Forms vary by program and lending institution, but they all ask for the same information. You should be prepared to answer the following questions. It s a good idea to have this information prepared before you fill out the application: -Why are you applying for this loan? -How will the loan proceeds be used? -What assets need to be purchased, and who are your suppliers? -What other business debt do you have, and who are your creditors? -Who are the members of your management team? 4

5 6 Golden Rules for Building Your Business with Social Media Is your small business on social media? Is it working for you? Social media is the top online activity in the U.S., according to Marketing TechBlog it also has a huge influence on consumer buying decisions. Forty-six percent of web users look toward social media when making a purchase, while 8 out of 10 SMBs report that they are using social media to drive growth. Here are six golden rules that can help. Social media is clearly a proven channel for helping small business find and convert prospects but it takes time and effort. Small businesses need to find ways to connect, engage and drive actions. Integrate your marketing channels How do you get found on Twitter, Facebook or any social media platform? It starts by prompting people with visual clues throughout your marketing channels, mostly your website. Like adding Follow buttons on your website banners. Plan your content What should you post about? This will vary greatly from business to business and takes time to gauge. As a general rule, people follow brands on social media for the following top five reasons: 1. To get promotions and discounts 2. For the latest product information 3. Customer service (feedback, complaints, queries) 4. Entertaining content 5. The ability to offer feedback Try to apply an 80:20 rule 80 percent of your posts should focus on driving interactions while 20 percent of your posts can incorporate direct offers. Use photos and videos and other rich media A visual is worth a thousand words. Look for ways to integrate images and rich media content into your social media posts. Engage your audience If you are posting interesting content, engagement will follow naturally. However, there are a few things you can do to encourage these relationships listen to fans, respond to comments, encourage fans to share photos and experiences. Think of social media as a form of conversation. Treat social media as a customer service tool Customer service is a very important aspect of social media. Be prepared to monitor and respond to questions and complaints. Measure Be sure to measure the impact of your social media efforts. Use third party apps or Facebook s insights tool to monitor click-through rates. Compare these across posts to see if there s a trend as to the type of content that s popular. Use this data to inform and adjust your content strategy. Source: Caron Beesley, Contributor Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. CCD s LENDING PROGRAMS: Our programs are designed for small businesses that do not qualify for conventional commercial loans through lending institutions. Government guaranteed and direct loans are available which allows credit worthy businesses to get financing, generally through a participatory relationship with a commercial bank. We deliver professional commercial loan marketing, packaging, closing, servicing and collection services through various direct and indirect loan programs. We also provide administrative services, technical assistance and professional lending services through contractual relationships to local government and non-profit entities that offer economic development oriented commercial loans. Our service area currently consists of all counties in Oregon for the SBA 504 Loan Program. Our service area for our in-house Revolving Loan Funds are the following Oregon counties: Coos, Curry, Douglas, Jackson and Josephine. 5

6 CCD Business Development Corporation Roseburg Office: 522 SE Washington Ave., Ste. 111A Roseburg, OR (541) or (800) North Bend Office: 2455 Maple Leaf PO Box 444 North Bend, OR (541) or (866) CCD is a private / non-profit corporation formed in CCD was designed by the 3 counties (Coos, Curry & Douglas) not as a replacement for the individual county development efforts but as a focal point for economic development throughout the 3 county areas. CCD is recognized as an Economic Development District. In 1981, CCD expanded its financial services. The US Small Business Administration designated CCD as a Certified Development Company, which enabled CCD to begin helping businesses with SBA financing programs. Equal Credit Opportunity Lender Certified Development Companies: Growing Small Businesses, Jobs, Communities CCD Business Development Corporation Board and Staff would like to congratulate the following new Borrowers: Asa Brothers LLC (Multnomah County); Old 99 Brewing Co., LLC (Douglas County); and Acuvest, LLC (Coos County) Visit Our Website: CCD Business Development Corporation (CCD) is dedicated to helping small business owners get the financing they need to start or expand their business. Our CDC has a 24-member Board of Directors, comprised of volunteers who care about the economic development role played by small business owners. Our Board includes representatives from banks, small businesses, government and community groups. To Get Started Contact: CCD s Lending Team Theresa Haga Business Finance Manager t.haga@ccdbusiness.com Louie Robida Debbie Caterson Loan Officer / Marketing Loan Officer ccdbusiness@hevanet.com debbiecaterson@yahoo.com WE WANT YOUR BUSINESS! Our Lending Staff: Our lending staff are experts in government loan programs, providing excellent advice and counsel to the small business owners and private commercial lenders. Federal Notice: To help the government fight the funding of terrorism and money laundering activities. Federal Law requires all Certified Development Companies to obtain, verify and record information that identifies each person who applies for a loan. 6