06-22-2005 Council Agenda - Laserfiche WebLink

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Twin Cities Community Capital Fund Page 2 of 3 maturity provisions. Fees and Charges: • A 1.75% loan origination fee will be charged to all TCCCF borrowers. This fee will be assessed only for approved loans, but must be paid at or prior to loan closing. • A 0.5% loan underwriting fee shall be paid by the borrower at loan closing. • Borrowers are responsible for paying all legal and other loan closing costs incurred by TCCCF. Credit Criteria Equ t1LQLC_as h_Be.- vtir_em a nis: • Loan applicants must demonstrate an acceptable level of project equity, with a minimum of 10% equity provided by the borrower. Subordinated debt within the same project financing may be considered as additional equity, subject to an intercreditor agreement. All other criteria will apply, including subordinate debt, when calculating debt coverage. Collated Restgiremen_ts; • Loan collateral coverage must be at least 90% of the TCCCF loan amount on appraised value of assets, less all senior debt. • TCCCF will consider the following collateral positions: first security interest, shared first security interest, subordinated security interest and shared subordinated security interest. Debt to Worth• • TCCCF will consider financing projects that have a tangible net worth ratio on an actual and proforma basis of no greater than 10 to 1 (10% project equity or greater). Each project shall be analyzed on its own merits and its ability to service both existing and new debt. • TCCCF borrowers (real estate holding companies excluded) should have a tangible net worth of 5 to 1 or less, based upon their most recent financial statements and, on a proforma basis, reflecting the new proposed debt. Personal Guarantees: • Personal guarantees will be required for all owners with 20% or greater ownership in closely held businesses. Management Exjterience & Comoanv Performance: • The TCCCF will require that the project have capable, skilled management through experience or expertise in the applicant's industry, either through previous successful business ownership or through appropriate managerial support services. Borrowers having erratic or undocumented earnings, or borrowers having new and unproven management, will require more loan risk sharing by the TCCCF member originating the loan. Repayment Ability: • Applicants must demonstrate adequate historical cash flow showing trends that support debt service coverage of at least 1.1 to 1. Proforma financial cash flows must also support debt service coverage of at least one to one. -10- http://www.tccc£org/loan_apply.cfm 6/6/2005