SMALL BUSINESS FINANCING Division of Neighborhood Revitalization

Martin O'Malley

GOVERNOR

Anthony G. Brown

LT. GOVERNOR

Raymond A. Skinner

SECRETARY

Clarence J. Snuggs

DEPUTY SECRETARY

Business Lending Programs

• Neighborhood BusinessWorks Loan Program

• Microenterprise Loan Program

• Linked Deposit

• Maryland Capital Access Program

NEIGHBORHOOD REVITALIZATION

Linked Deposit ProgramProgram is for Certified Minority Business Enterprises (MBEs) reducing the interest rate on loans from participating banks

• Businesses certified by the Maryland Department of Transportation (MDOT) as a Minority Business Enterprise (MBE) are eligible

• 2% interest rate reduction on loans from enrolled financial institutions• First National Bank, The Columbia Bank, Industrial Bank• Loans are underwritten and approved by the financial institution• Maryland State Treasurer’s office deposits matching funds in a CD at the

lending institution• Loans may not exceed $1 million• Loan terms can not exceed 10 years• Points charged by lender can not exceed 1% • Project or activity must be in Maryland

Maryland Capital Access Program (MCAP)Program allows lenders to make loans that fall slightly outside of their normal credit guidelines.

• A loss reserve account is created to strengthen applications with weak credit or collateral

• Lender, Borrower, and DHCD creates a loss reserve account at the lending institution for 6% of the loan amount.

• The lender contributes 1.5%, the borrower contributes 1.5%, and DHCD puts in 3%

• Program lenders – BB&T and PNC• The borrower applies directly to one of the lending institutions• The loan is underwritten and funded by the lending institution • Eligible loan amounts are from $10,000 - $1 million • Any type of commercial loan qualifies, lines of credit and term loans

Neighborhood Business Works Loan Program

Program provides gap financing to new or expanding small businesses and nonprofit organizations in Sustainable Communities throughout the State

• Loans from $10,000 - $500,000 • No more than 50% of total project cost• Loan terms from 5 – 15 years• Interest rates from 3% - 5%• Minimum 5% of total project cash contribution from applicant • 75% collateral coverage and personal guarantees required• Primary lender required• This loan is underwritten and funded by the State

Micro Lending Loan ProgramProgram provides financing to new or existing small businesses and nonprofit organizations in Sustainable Communities throughout the State

• Loans from $5,000 - $35,000 • Loan terms up to 5 years• Interest rates competitive• collateral and personal guarantees required• This loan is underwritten and funded by the State

Eligible Applicants

• Maryland-based small businesses (small business as defined by the U.S. Small Business Administration)

• Nonprofit organizations whose activities contribute to a broader revitalization effort and whose projects are intended to promote investment in commercial districts or town centers

• Commercial Property Owners

• Commercial Property Tenants

• Developers

• Note: Local governments are not eligible applicants.

NEIGHBORHOOD BUSINESSWORKS

• Eligible Projects/Use of Funds• New construction or rehabilitation • Leasehold improvements• Real estate acquisition • Manufacturing • Retail/Franchise• Market/Planning/Feasibility studies• Machinery and equipment• Furniture, fixtures and equipment• Working capital

Neighborhood BusinessWorks

Program provides gap financing to new or expanding small businesses and nonprofit organizations in designated Sustainable Communities throughout the State

• Eligible uses: Commercial building rehab or leasehold improvement, equipment & furniture, inventory and working capital

• Loans from $10,000 - $500,000

• Financing up to 50% of the total project cost

• Commitment for other 50% of project must be committed

• Loan terms from 5 – 15 years - Interest rates from 3% - 5%

• Minimum 5% of total project as cash contribution from applicant

• Minimum 75% collateral coverage and personal guarantees required

• This loan is underwritten and funded by the State

Sustainable Communities

Sources & Uses: Itemize how you plan to fund this project

Breakdown of total project costs by funding source:

(A) Use of Funds

(B) Total Costs

(C) NBW

Request

(D) Other

Lender(s)

(E) Applicant’s Contribution

Building/Site Acquisition $ $ $` $

Building Construction/ Expansion/Improvements

$ $ $` $

Pre-Development Costs $ $ $ $

Furniture, Fixtures, Equipment $ $ $ $

Inventory $ $ $ $

Start-up Costs $ $ $ $

Working Capital $ $ $ $

Other (explain) $ $ $ $

TOTAL PROJECT:

$ $ * $ $ **

*Not to exceed 50% of total project costs. **Minimum of 5% of total project costs.

Microenterprise Loan Program

Program provides financing to new or existing small businesses and nonprofit organizations in designated Sustainable Communities throughout the State

• Eligible uses: Working capital or other approved business expense

• Loans up to $35,000

• Loan term up to 5 years

• Rates are from 5% - 7%

• Loan underwritten by the State or Intermediary Microlending Partners:

Maryland Capital Enterprises

Economic Development Group

Prince George’s Financial Services

Linked Deposit

Program provides more affordable capital to MDOT certified Minority Business Enterprises (MBEs) reducing the interest rate on loans from participating banks for businesses in Maryland

• Eligible uses: business restructuring or and other business expenses deemed eligible by participating bank and program guidelines

• Borrowers receive a reduced rate that is 2% below market

• Participating banks: First National Bank, The Columbia Bank, Industrial Bank

• Loans are underwritten and approved by the financial institution

• Maryland State Treasurer’s office deposits matching funds in the amount of the loan at the lending institution

• Loans may not exceed $1 million or a term of 10 years

• Points charged by lender can not exceed 1%

Maryland Capital Access Program

Program allows lenders to make loans that fall slightly outside of their normal credit guidelines for businesses located in Priority Funding Areas throughout the State.

• Eligible uses: Any commercial term loan deemed qualified by lender

• A loss reserve account is created to strengthen applications with weak credit or collateral

• Lender, Borrower, and DHCD creates a loss reserve account at the lending institution for 6% of the loan amount.

• The lender contributes 1.5%, the borrower contributes 1.5%, and DHCD puts in 3%

• Program lenders – BB&T and PNC

• The borrower applies directly to one of the lending institutions

• The loan is underwritten and funded by the lending institution

• Eligible loan amounts are from $10,000 - $1 million

Neighborhood BusinessWorks/Microenterprise

Project: Potomac Gourmet Pantry

Loan Amount: $300,000

Location: Prince George’s County

Jobs Created: 25

Loans Closed: October 2010

22

Project: Babe (A Boutique)

Loan Amount: $35,000

Location: Baltimore City

Jobs Sustained/Created: 2

Loans Closed: June 2011

Linked Deposit/Maryland Capital Access

Borrower: Amtrac Railroad

Contractors of Maryland, Inc.

Loan Amount: $431,660

Location: Washington County

Jobs Sustained: 3

Loans Closed: May 2009

22

Borrower: Ed Paton Insurance

Loan Amount: $75,000

Enrolled by: BB&T

Location: Prince George’s

Jobs Retained: 3

Loan Closed: June 2010

Neighborhood BusinessWorks Projects

Arrow Bicycle, Hyattsville, MD Joie De Vivre, Cambridge, MD

Big Bad Woof, Hyattsville, MD Roscoe’s Neapolitan Pizzeria, Takoma Park, MD

Limerick Pub Wheaton

Before After

John L Williams Funeral Directors Baltimore City

Before After

Pemberton Café Salisbury

Before After

Joie de Vive Cambridge

Before After

Neighborhood BusinessWorks

• Since 1996, Neighborhood BusinessWorks has:

• Loaned more than $62 million to 300+ businesses, creating 6,170 jobs across Maryland and leveraging

$206 million in private investment

• Loaned nearly $16 million to 88 businesses in historic Main Street Maryland communities

Thank You

For More Information Contact:

Michael Haloskey, Director Business Lending

Phone: 410-514-7237

Email: Haloskey@mdhousing.org

Cheivelle Hill, Senior Loan Underwriter

Phone: 410-514-7245

Email: Hillc@mdhousing.org