New Market Tax Credit Financing by hem73577

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									CBAI New Markets Tax Credit
    Financing Program

     Preliminary Project

     Information Form




                           Rev. 11/08/05 FAH
                      CBAI New Markets Tax Credit
                           Financing Program
                       Initial Application Process
You need to:

   1.     Determine that the Business or Project is located in a Low-Income
          Community. Read page 6, Preliminary Project Information Form.

   2.     Determine that the loan amount to Business or Project will exceed $2.5
          million (“Minimum Deal Size”)

   3.     Complete Preliminary Project Information Form and send to Karen McKenna
          at Krieg DeVault LLP (contact information below). Only the best
          Applications will be considered.

   4.     Request referrals to CBAI Banks servicing the area in which the Business or
          Project is located. Read page 2, Existing Banking Relationships, Preliminary
          Project Information Form. Please reference your Preliminary Project
          Information Form.

   5.     Obtain a “Preliminary Loan Term Sheet” from a “Sponsoring CBAI Bank.”
          Read page 5 and see page 7, Sample Loan Term Sheet, Preliminary Project
          Information Form.

          The Project may only have one (1) “Sponsoring CBAI Member” (or one
          group of participant “Sponsoring CBAI Members.”) CBAI will only “work
          with” the Project’s Selected “Sponsoring CBAI Member.”

          Any “Sponsoring CBAI Member” must be a member of Indiana Loan
          ClearingHouse, Inc.

   6.     Send the “Sponsoring CBAI Bank’s” Preliminary Term Sheet to Karen
          McKenna at Krieg DeVault LLP. Contact information below. Please
          reference your Preliminary Project Information Form. Underwriting by CBAI
          will not be initiated until the “Sponsoring CBAI Bank’s” Term Sheet is
          received by CBAI.
       If you have any questions, please contact:

Karen J. McKenna                                    Matthew E. Conrad, Esq.
Krieg DeVault LLP                                   Krieg DeVault LLP
12800 N. Meridian Street, Suite 300                 12800 N. Meridian Street, Suite 300
Carmel, Indiana 46032                      or       Carmel, Indiana 46032
(317) 566-1110 x. 6443                              (317) 238-6326
Fax: (317) 636-1507                                 Fax: (317) 636-1507
kmckenna@kdlegal.com                                mconrad@kdlegal.com



Why should you pursue New Markets Tax Credit Financing?

       New Markets Tax Credit Financing should reduce your borrowing rate 100 to 150
basis points (1.00% to 1.50%) per year for 7 years. If you combine New Markets Tax
Credit Financing with other state and local incentives (e.g. TIF Bonds used as credit
enhancement; CReED Credits or HBI Credits) your borrowing rate may be reduced 200
to 300 basis points (2.00% to 3.00%) per year for 7 years. So if you can borrow at
7.50%, you could achieve the following borrowing rates:

                       NMTC Only                           NMTC + Other Incentives

                     6.00% to 6.50%                             4.50% to 5.50%

If you would like to learn more, please call Karen or Matt (contact information above).
We will send you additional information to help you understand how this all works.
                                 CBAI New Markets Tax Credit Financing Program
                                      Preliminary Project Information Form


                                                                                                          Date Submitted:

Bank Name:

Loan Officer Name:                                                                Title:

Address:

City:                                                        State: IN                             Zip:
Phone:                                              Fax:

E-mail:

Business Name:

Contact Name:                                                            Title:

Address:

City:                                                State: IN                             Zip:

Phone:                                                       Fax:

Email:

Brief Business/Project Description (attach as Exhibit 1 if necessary):




Project Location Address:

City:                                               State: IN                              Zip:

Census Tract Project is Located (see attached list):
Local Economic Development Professional Contact Information:


Financing Sources & Uses Before NMTC Financing - Estimated or Actual:

Project Sources (Attach as Exhibit 2 if necessary):

                                        Amount                           Briefly Describe Source

         A.    Equity:
         B.    Debt:
         C.    Grants:
         D.    Other

                                                                 1                                                      Initial Form
        E.      Gap:
                Total Sources:


Project Uses:

        Land:
        Improvements:
        Equipment:
        Furniture:
        Other:
    Total Uses:

Existing Banking Relationships. In order to be considered for the CBAI New Market Tax Credit Financing Program,
the Project must be “sponsored” by a bank that is a member of the Community Bankers Association of Indiana (CBAI).
In the event that the bank listed on Page 1 of this Application is not a member of CBAI, we will put the Business in
contact with a CBAI member bank or attempt to cause the listed bank to become a member of CBAI. Only Indiana
domiciled Banks approved by CBAI may become a member. Please list all Indiana banks with whom the Business has an
existing relationship. Attached as Exhibit 3 if necessary. See www.cbai.org or contact Joe DeHaven at 317-595-6810
for a CBAI Members list.

             Bank Name                               Personal Contact                             Phone / Email




Estimated or Actual Project Timeline. Please provide an estimated timeline of milestones for the Project, including
any deadlines associated with any grants, other tax credits, other economic incentives, environmental issues, zoning
issues, site control issues, or agreements with any municipalities or tenants/end users. (Attach as Exhibit 4 if necessary).

Loan Commitment Date:
Tax Credit Commitment Date
 (please specify type of tax credit):
Commitment Date for Other
 Incentives (please specify incentive):
Construction Loan Closing Date:
Substantial Completion Date:
Permanent Financing Closing Date:


Mission Statement for Project. Briefly describe in an attached narrative (as Exhibit 5) in general terms what the
mission, purpose or goal is for the Business in doing this Project.

Loan Terms. Briefly describe in an attached narrative (as Exhibit 6) in general terms the loan terms the Bank would
consider for this Project. (fixed or variable rate; base interest rate index plus factor; term; amortization period; collateral
requirements; guarantees, debt service coverage ratio, loan to value, etc.)

Status of Loan Commitment / Term Sheet. Please check the appropriate box below to indicate the status if the
Business has not yet obtained either a loan commitment or term sheet from a bank for financing of the Project. (Attach as
Exhibit 7.)

        Business has not sought a loan commitment or term sheet from any bank.
        Business has submitted loan package to bank but has not received loan commitment or term sheet.
                                                              2                                                      Initial Form
          Business has received verbal approval and terms from bank but has not received loan commitment or term sheet.

Projected Community Impact Summary. (Attached as Exhibit 8 if necessary.)

    Permanent FTE2 Jobs Created or Retained:
    Pre-development or Construction1 FTE2 Jobs Created or Retained3:
    Square Feet of Space Developed or Rehabilitated:
    # of Housing Units Developed or Rehabilitated:
    # of Industrial or Commercial Acres Developed:

Other Subsidies. In an attached narrative (as Exhibit 9) describe all of the Federal, State and local grants, loans, leases,
tax credits, tax-exempt financing, tax improvement financing, tax abatement, tax exemption, credit enhancement and any
other additional subsidy (direct or indirect) the Project will receive.

Designate whether the Project is located in one or more of the geographic areas identified below.

    1.       Areas with poverty greater than 30 percent

    2.       Areas with median incomes of less than 60 percent of area median income, as measured by the
             Metropolitan Area in which the communities are located, or as measured by the statewide area
             median income if the area is not in a Metropolitan Area

    3.       Areas with unemployment rates at least 1.5 times the national average

    4.       Local areas designated for redevelopment by a governmental agency

    5.       Federally designated Empowerment Zones, Enterprise Communities or Renewal Communities

    6.       SBA Designated HUB Zones

    7.       Brownfields redevelopment areas

    8.       Areas encompassed by a HOPE VI redevelopment plan

    9.       CDFI Hot Zones

    10.      Indiana Blighted Areas.

    11.      Indiana Economic Revitalization Areas.

    12.      Indiana Enterprise Zones.

    13.      Indiana Community Revitalization Enhancement District

    14.      Indiana MainStreet Program

    15.      Historic Building (IRC 47 Tax Credit)


1
  A permanent job is one that is at least 24 months in duration. Pre-development or construction jobs are short-terms (i.e., under 24
months in duration) that result from real estate projects or financing.
2
  Full time equivalent (FTE) is at least a 35-hour workweek.
3
  A retained job is a job that exists at the business at the time the business was financed.

                                                                   3                                                          Initial Form
    16.       Other (list below) (Identify programs and their objectives) (attached as Exhibit 10 if necessary):

Community Impact. Designate whether the Project will achieve one or more of the following impacts (check all that
apply.) For each item checked, attach a narrative (Exhibit 11) that quantifies the impacts that the Project is estimated to
achieve (e.g. number of jobs created for Low-Income Persons.)

          Create or retain jobs for Low-Income Persons or residents of Low-Income Communities.

          Increase wages or incomes for Low-Income Persons or residents of Low-Income Communities.

          Finance or assist businesses owned by residents of, or otherwise committed to remain in, the Low-Income
            Communities.

          Finance or assist minority- or women-owned businesses, or businesses owned by Low-Income Persons.

          Finance or assist businesses (including non-profit organizations) or real estate projects that provide childcare,
            health care, educational or other benefits to Low-Income Persons or residents of Low-Income Communities.

          Facilitate wealth-creation or asset accumulation (such as home ownership) by Low-Income Persons or residents
           of Low-Income Communities.

          Provide goods and services to Low-Income Persons or residents of Low-Income Communities.

          Other (explain):




PLEASE RETURN THIS FORM TO: Karen McKenna, Krieg DeVault LLP, 12800 North Meridian Street, Suite
300, Carmel, Indiana 46032 or Fax to (317) 636-1507 to the attention of Karen McKenna. To obtain an electronic
version of this form, contact Karen McKenna at (317) 566-1110 or email kmckenna@kdlegal.com.




                                                                4                                                      Initial Form
                                           CBAI New Markets Tax Credit
                                               Financing Program

                                                 Question and Answer


1.   What is the CBAI NMTC Financing Program?

     CBAI will make available to the Customers of CBAI Member Banks below-market rate interest only seven (7) year
     loans (see Questions 2 below) for the following type of Customers and Projects located in certain qualified Low
     Income Communities (described in Question 4 below).

       Manufacturing Facilities. New or existing facility construction; expansion or improvements; equipment; and
       furniture and working capital.

       Distribution Facilities. New or existing construction, expansion or improvements; equipment; furniture; and
       working capital.

       Community Facilities. New or existing facilities (daycare, schools, training facilities, assisted living (pay per
       day/no leases), nursing homes, hospital, jails, sewer plants, water treatment, telephone, cable, electricity, internet,
       etc.) construction, expansion or improvements (including interior build-out); equipment; furniture; and working
       capital.

       Office. New or existing construction, expansion or improvements (including interior build-out), furniture;
       equipment; and working capital.

       Retail. New or existing construction, expansion or improvements (including interior build-out); fixtures;
       equipment; and working capital.

       Mixed-Use. (more than 30% of revenue attributable to retail and/or office; and less than 70% of revenue
       attributable to apartments for lease): new or existing construction, expansion or improvements (including interior
       build-out and appliances); furniture; equipment; and working capital.

       Other Industrial Facilities. New or existing facilities; construction, expansion or improvements (including
       build-out); equipment; furniture; and working capital.

       Real Estate Development. Industrial or commercial including land acquisition, infra-structure; and working
       capital.

2.   What are the credit criteria for CBAI NMTC Financing Program?

     A “Sponsoring CBAI Bank Member” must first determine that the “Sponsoring CBAI Bank Member” would make
     a loan to the Customer for a qualified project (described in Question 1 above) located in a qualified Low Income
     Community (described in Question 4 below.) If the “Sponsoring CBAI Bank Member” would make a loan to the
     customer for a project described above, the project will meet the initial credit criteria for the CBAI NMTC
     Financing Program.

3.   What if the loan amount required for the Project exceeds the CBAI Member’s legal lending limit?

     The Indiana Loan ClearingHouse (ILCH), who will administer the program to assure NMTC Regulation
     compliance, is also, available to find other CBAI Bank Member loan participants. So if the loan need is in excess of
     a “Sponsoring CBAI bank” member’s legal lending limit, or a loan concentration issues arises, ILCH will find
     CBAI participants to purchase the over limit amount or to purchase whole loans if concentration is an issue. Our
     goal is to assist in economic development and job creation in qualified low income communities, regardless of the


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      amount of the loan or type of qualified business.

4.    How do I determine if the Project is located in a Low-Income Community?

      A. Review attached list and access www.cdfifund.gov. to confirm.

      B. Log into “My CDFI”. If you do not have a “login” and password, you will need to register as a “New User”.
         At this time, you will need an Employer Identification Number (EIN). Once you are registered, you are able to
         access this information.

      C. Click on “Mapping” on the left-side of the screen.

      D. Please be sure to read the greeting and go through the Tutorial.

      E. If you have a questions regarding access to Low-Information Community information, contact Karen McKenna
         at (317) 566-1110 or e-mail kmckenna@kdlegal.com.

     For Additional Information contact:


     S. Joseph DeHaven (Joe)                                       Richard E. Ross
     President & Chief Executive Officer                           Program Administrator
     Community Bankers Association of Indiana, Inc.                Indiana Loan Clearinghouse (ILCH)
     6666 E. 75th Street                                           2630 Minorca Way
     Suite 250                                                     Del Mar, CA 92014
     Indianapolis, IN 46250                                        (858) 481-2510
     (317) 595-6810                                                Fax (858) 792-6044
     Fax (317) 595-6820                                            E-Mail mailto:richard@rrossinc.com
     E-Mail mailto:dehaven@cbai.org
     Web Site http://www.cbai.org (Main Office)




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                                Sponsoring CBAI Member’s
                                 Sample Loan Term Sheet

    Loan Amount:           $7,500,000

    Interest Rate:         7.50% (fixed)

    Amortization:          20

    Annual Debt Service:   $725,033.88 (annual)

    Term:                  7 years

    Balloon:               $6,009,674

    Borrower’s Equity:     $2,500,000

    Collateral:            $10 million Manufacturing facility (real estate, equipment, inventory, etc.)

    Credit Enhancement:    Personal Guaranty of Owner of Borrower; Pledge of 100% of stock of Borrower;
                           Irrevocable Proxy with stock powers (voting control, etc.)

    Loan Documents:        Loan Agreement, Mortgage, Security Agreement, UCC Filings, Guaranty, Stock
                           Pledge with Irrevocable Proxy.


KD_IM-595604_1.DOC




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