Loan Eligibility Criteria / Terms

 

§         Small businesses located in Cariboo-Chilcotin.

§         Loans available to individuals, partnerships, societies, corporations or co-operatives.

§         Eligible projects must meet the test of viability and environmental sustainability.

§         Equity contributions by the applicants must be deemed acceptable by the committee.

§         Security coverage will be required to cover the amount of loan requested.

§         An interest rate of 10%, with regular scheduled payments of principal and interest.

§        Projects that will not be financed: the manufacture, production or sale of alcohol, the

     purchase of franchises; multi-level marketing schemes; gambling establishments; and projects

     of a religious or political nature.

Submission Materials for Applications

1.      Loan Application package and 1% Application Fee.

2.      Client loan submission and due diligence may include the following:

·      Business Plan – Operations, Management, Marketing, Competition,

·      Personal net worth statements and biographies.

·      Annual Financial Statements –3 years if possible.

·      Security, Appraisals, Environmental Studies, other supportive materials.

·      Forecasts reflecting 2 years cash flow statements and /or analysis.

·      Proposed program and financing. Breakdowns of the costs and verifications if possible

  (i.e. construction quotes, equip. purchase invoices, purchase offers or agreements etc.)

3.      The due diligence credit summary prepared by the CFDC loans officer will cover the following

      areas of analysis. Confirmation and follow-up will be done on all information submitted

a)      Proposed loan terms and conditions by the CFDC to the Client.

b)      Management – history and competence.

c)      Project Analysis – Why? When? How? Confirmation of costs, suitability, Community

      economic impact and benefit.

d)      Personal Net-Worth Statement Review – are the sources of funds apparent, any cash drains

      or cause for concern. Should also confirm or address other sources of funds.

e)      Security Proposed – costs, liquidation values, and potential for disposal difficulties or high costs.

f)        Equity – levels, format adequacy for the present and future needs of the business.

g)      Working Capital – Analysis of adequacy for immediate and future needs.

h)      Repayment Abilities – historical cash flow generation analysis, forecasts, including supportive

      evidence for key elements of forecasts, addressing competition, market conditions, etc.

i)        Environmental Commentary – prescribed checklist plus nature of business / business practices review.

Process

The Loan Credit Summary will address the following:

§         benefits and risks of the project

§         provide analysis of the viability of the project,

§         security to be taken, and

§         loan terms.

The application is then presented to the Loans Committee for the final decision.

Requests may be denied where the Committee feels that the project does not fully meet the

program criteria, the risk of failure is too great, inadequate security exists for the loan,

due diligence has not been reasonably completed or components of the program do not

comply with policies required.

Process Chart / Time Line