North Central NCWC
August 17-19, 2009 Chicago, IL
Financial Assistance Programs
Financing Growth Opportunities
Perfect Business Opportunity Found
– Determine how much „cash‟ will you need
Capital, Working Capital, Total Cash flow needs assessment • Review financial projections (expense and income timing) » Cash flow & Working capital needs • Review supply and equipment lists » Capital needs
– Determine how you will finance the amounts
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Document Plans
Complete or update Business Plan
– Operational plans and organizational infrastructure impacts – Financial Statements and Projections
Income Expense • Operating and Capital • Cash flow
– Projection alternatives (what-ifs)
Best Case Worst Case Breakeven
– Don‟t forget to include loan funding and repayments (principle and interest) on Cash flow
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Identify Funding Sources
Internal versus External Financing
– Internal
Investments Endowments Current Cash flow Unrestricted and Restricted Reserves
– External (related parties may need to be disclosed on Form 990)
Banks/Financial Institutions Grants Donors Economic Development or Federal Loan Programs • Hub Zone Financing NISH
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Funding Options/Challenges
– Internal Financing
Loss of income Flexibility Financial strength Opportunity costs
– External Financing
Covenants Loan requirements Reporting Credit worthiness Financing costs
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Financial Statement & Projections
Balance Sheet
– Review ratios
Compare to benchmarks • Non-profits • Commercial
– Understand expected impact
Ratio impact Liquidity reductions Debt covenants
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Financial Statement & Projections (cont‟d)
Income Statement
– Review ratios and impact
Compare to benchmarks • Non-profits • Commercial Include depreciation and other non-cash expenses Include costs of capital/borrowing Include impacts on existing infrastructure (overhead departments)
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Financial Statement & Projections (cont‟d)
Cash Flow Projections for 3-years
– Review business plan and environmental scan
Include best and worst case options Determine break-even point Ensure understanding of carrying costs
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Capital Equipment List
Equipment used to manufacture a product, provide a services, or to sell, store and deliver merchandise
– Office furniture, business equipment, machinery
These items are depreciable, and their cost is expressed as “depreciation” expense on the income statement
– Depreciation is a non-cash event but is key to planning for equipment costs and replacement
Need to “replace” funds to buy new
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Application or Expected Effect of Loan or Investment How is loan/investment to be spent?
– New Equipment – Working Capital
Inventory Supplies
– Specific items to be purchased/leased
How will the loan/investment make your business more successful or profitable?
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Qualifications for NISH Loans/Leases
In all cases you must be compliant in the following areas:
– Applicant must be a producing CRP – Must be current in submission of invoices and payment of NISH fees (within 30 days) – Must be in compliance with Agency and AbilityOne ratios – Must be timely in submitting QERs and 404s
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NISH Financial Resources
Resource
Interest-Free Loan
Maximum $
$75,000 or 15% of projects annual PL value $100,000 $500,000 $500,000 Up to $200,000
Pay Back Terms
Up to 3-years
Capital Equipment Loan Capital Equipment Lease Capacity Building Lease Working Capital Short-Term Loan
Up to 5-years Up to 5-years Up to 5-years (PL add within 2-years) 6 months
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NISH Financial Resources (cont‟d)
Resource
Training Incentive (Voucher) Program
Maximum $
Earned based on: direct labor hours, new producing CRPs, NISH EDs, and survey respondents $500 per potential worker
Pay Back Terms
N/A
Disability Eligibility Documentation Grant Professional Development Grant Prompt Payment Discount
N/A N/A N/A N/A
Management Assistance Grant $11,500
$11,500 ½ to 1% discount of net commissions due NISH
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Lines of Business Specific
Teleservices
– To assist with hosting and start-up costs – POC: Peggy Gritt, pgritt@nish.org
Secure Document Destruction
– To assist with initial entry into SDD with interestfree financing – POC: Shawn Murphy, smurphy@nish.org
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Key Points on Loans
Capital Equipment Loan Fund
– – – – Must increase direct labor hours, improve quality, or safety, or provide an accommodation Interest-free if increase direct labor hours and jobs Low interest if no direct labor hour increase Interest rate is ½ of Prime per the Wall Street Journal on the date the loan is disbursed Effective 10/1/09 To assist with raw material and related inventory carrying costs To be repaid within 6 months
Working Capital Short-Term Loan
– – –
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Key Points on Leases
Capital Equipment Lease Program
– – – Must increase direct labor hours Leases are issued through Associated Bank in Minnesota NISH guarantees the lease balance and funds the interest portion Work targeted for PL Add within 2-years Requires commitment from:
PA CRP/NPA NISH Executive Director
Capacity Building Lease Program
– –
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Key Points on Grants/Vouchers
Management Assistance Grant Program
– – Fund start-up cost on new contracts Maximum grant is the lesser of $11,500 or the salary and benefits of the Project Manager, Supervisor, or Trainer for a 3-month period before and 1-month period after project start-up Offset expenses for NISH training, the NISH annual conference or an NCWC meeting Vouchers must be used within 1-year of distribution
Training Incentive (Voucher) Program
– –
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Key Points on Grants (cont‟d)
Disability Eligibility Documentation Grant
– Designed to assist with cost associated with AbilityOne disability determination costs
Recent survey indicates that 35% of AbilityOne workers are self-referred Can be used for up to 2% of workers (maximum of 20 per CRP) $500 per applicable employee Brian DeAtley, bdeatley@nish.org 571-226-4523
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Key Points on Grant/Program
Professional Development Management Grant
– – Goal: To increase upward mobility for people with severe disabilities to supervisory position To assist with cost associated with the recruitment, accommodation, training or relocation
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Key Points on Payment Discount
Prompt Payment Discount
– It is NISH‟s policy to allow CRPs to take a discount in the amount of ½ of 1% of net commissions due to NISH if the commissions are paid by the CRP within 10 days following receipt of payment from the government Please contact your AR representative for correct application of the discount amount
–
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Financial Assistance Contacts
Applications: www.nish.org Required Documentation
– – – – Annual Audited Financials Most Recent Quarterly Financials UCC-1 for Capital Equipment Loan Contacts: Lorretta Stevens lstevens@nish.org 571-226-4501 Elizabeth Goodman egoodman@nish.org 571-226-4506
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Questions?
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