Saint Cloud Mortgage

The Business and Industry Guaranteed Loan Program helps create jobs and stimulates rural economies by providing financial backing for rural businesses.

Loan proceeds may be used for working capital, machinery and equipment, buildings and real estate, and certain types of debt refinancing.  The primary purpose is to create and maintain employment and improve the economic climate in rural communities.

This is achieved by expanding the lending capability of St. Cloud Mortgage in rural areas, helping us to make and service quality loans that provide lasting community benefits. This program represents a true private- public partnership.

Assistance under St. Cloud Mortgage Guaranteed Loan Program is available to virtually any legally organized entity, including a cooperative, corporation, partnership, trust or other profit or nonprofit entity, Indian tribe or Federally recognized tribal group, municipality, county, or other political subdivision of a State.

The maximum aggregate St. Cloud Mortgage Guaranteed Loan(s) amount that can be offered to any one borrower under this program is $25million.

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BUSINESS & INDUSTRY LOAN:
PRE-APPLICATION CHECK LIST

The following items are required for existing businesses:

1. Identification of the borrower, organization type, address, contact person, federal tax identification and all applicable phone numbers.
2. A detailed use of funds statement totally the amount of the loan to be considered.
3. A brief narrative description of the project, products and/or services provided, the market area and potential, the number of employees currently on payroll and projections of the number to be employed after the loan closes, and availability of raw materials and supplies if applicable.
4. Type and number of jobs created or saved. This is most important. The employment impact will generally impact not only the business, but ancillary businesses associated with the enterprise. For example, additional production capability might not only increase the number of employees in the business, but might also add jobs in trucking firms servicing the business or jobs with other vendors servicing the business. There might also be an impact on such things as seasonal employment. Employment/Unemployment statistics from the county or state might prove very helpful here.
5. A description of the collateral, with estimated values, and a statement outlining borrowers equity.
6. If a corporate borrower, the names and addresses of the borrower's parent, affiliates, and subsidiary firms, if any, and a description of the relationship.
7. For existing businesses, a current balance sheet and a profit and loss statement not more than 90 days old AND financial statements (no older than 60 days) for the borrower and any parent, affiliates, and subsidiaries for at least the 3 most recent years.

The following items are required for start-up businesses:

1. Identification of the borrower, organization type, address, contact person, federal tax identification and all applicable phone numbers.
2. A preliminary business plan which includes, at a minimum, a description of the business and project, management experience, products and services, proposed use of funds, availability of labor (see section 4 above), availability of raw materials and supplies, and the names of any corporate parent, affiliate and/or subsidiaries with a description of the relationship.
3. A detailed income/expense projection for the first full year of operation.
4. A description of the collateral, with estimated values, and a statement outlining borrowers equity. Financial statements for the borrower and any parent, affiliates, and subsidiaries for at least the 3 most recent years.
5. Financial statements for the borrower and any parent, affiliates, and subsidiaries for at least the 3 most recent years

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BUSINESS & INDUSTRY LOAN:
TIME LINE

B & I loans are accomplished through a set pattern of steps, all of which have differing timelines depending on the specifics of the loan requested and the industry the business is engaged in.

In general the steps are:

1. Pre-Application Qualification : See B&I Loan Pre-Application Check List
2. Field visit/pre-application conference (normally within 2 weeks)
3. Invitation for complete application
4. Lender submits complete application to USDA State Office
5. USDA credit and environmental analysis and USDA State Loan Review Board -- Approval decisions usually issued within 30 days of receipt of a complete application, unless the project involves extensive environmental analysis or exceeds State approval authority. IF THE LOAN EXCEEDS $5 MILLION THE LOAN DECISION MUST BE MADE BY WASHINGTON, D.C. AND THERE IS NO SET TIME LIMIT FOR THIS STEP.
6. USDA allocation of guarantee funds -- Funds are allocated monthly and there may be a delay if funds are no longer available for the month in which the application is approved. The loan request will automatically be carried into the next month for which funds are available.
7. USDA issues Conditional Commitment
8. Acceptance of Conditional Commitment
9. Loan documents and closing

As you can see, there are some areas for which estimating time is not possible; most significantly the time taken in compiling the required information from the borrower. You should anticipate that the entire loan process will probably take at least 90 days. If you have a request that has a shorter time requirement you should probably seek another lending institution.

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