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					                                 Financial Loan Program Matrix

PROGRAMS      Texas Department of                    Small Business                    United State Department              Accion Texas:
              Agriculture: Finance                   Administration:                   of Agriculture: Rural
              Authority Rural                                                          Business & Industry
              Development Finance                                                      Program
              Program
ELIGIBILITY   Applicants located within the state    To be eligible, the business      Eligibility for a guarantee from     Businesses that qualify must
              who can provide significant benefits   generally must be operated for    Rural Development begins with        be:
              for rural areas, show evidence of      profit and fall within the size   the determination of the impact on   * based in the area of
              creation or retention of               standards set by the SBA.         jobs. Rural Development              Accion Texas
              employment, and prove evidence of      Loans cannot be made to           priorities are:                        Programs
              reasonable equity in the project.      businesses engaged in             1. Saving existing jobs              * legal and a primary
                                                     speculation or investment. The    2. Expansion of existing               source of income
                                                     SBA determines if the business       businesses
                                                     qualifies as a small business     3. New plant location or new         Eligible business owners have:
                                                     based on the average number of       business start-up                 * relevant experience in job
                                                     employees during the preceding    4. Business which will generate      field
                                                     12 months or on sales averaged       little or no permanent            * personal investment in their
                                                     over the previous three years.       employment other than             business
                                                                                          the entrepreneur                  * strong commitment to their
                                                                                                                            business

                                                                                                                            Business owners must
                                                                                                                            * have businesses with a net
                                                                                                                            income under $50,000
                                                                                                                            * have an individual net
                                                                                                                            income under $100,000
                                                                                                                            * unable to borrow from
                                                                                                                            banks
                                                                                                                            * be 21 years of age or older
                                                                                                                            * not have any current
                                                                                                                            bankruptcies


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PROGRAMS   Texas Department of                     Small Business                     United State Depart-ment               Accion Texas:
           Agriculture: Finance                    Administration:                    of Agriculture: Rural
           Authority Rural                                                            Business & Industry
           Development Finance                                                        Program
           Program
 USE OF    Purchase of real estate,                Proceeds of the 7(a) loans may     Proceeds can be used as:               Accion Texas lends
 FUNDS     improvements, equipment, and            be used by start-ups or existing   * business and industrial              funds for any legitimate
           working capital. Refinancing of         businesses to-                       acquisitions                         business purpose,
           existing debt is prohibited except in   * expand or renovate               * purchase of land, machinery,         including:
           cases of further expansion or             facilities                         and equipment                        * working capital
           development of the project. A           * purchase inventory,              * construction, enlargement,           * inventory and
           guaranty cannot be provided that          equipment, fixtures and            or modernization                       equipment
           would improve a lenders position         leasehold improvements           * pollution control or abate-          * owner occupied
           in a commitment to the applicant.       * finance receivables and            ment                                   commercial real
                                                     augment working capital          * eligible fees and costs                estate
                                                   * refinance existing debt (for     * educational or training facilities
                                                     compelling credit reasons of     * refinancing when it is
                                                      benefit to the borrower)          necessary to save jobs
                                                   * provide seasonal lines of        * feasibility studies
                                                     credit                           * hotel/motels
                                                   * construct commercial             * tourist facilities
                                                     buildings and/or                 * recreation facilities
                                                   * purchase land or buildings.      * working capital




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PROGRAMS   Texas Department of Agriculture:       Small Business Administration:       United State Department of           Accion Texas:
           Finance Authority Rural                                                     Agriculture: Rural Business &
           Development Finance Program                                                 Industry Program

GUARANTY   From $100,000 to $5,000,000. The       $0 to $500,000 maximum loan size     There is no minimum loan size,       N/A
 AMOUNT    maximum will not exceed the lesser     has been established for the 7(a)    and the maximum loan size that
           of 50% of the loan, 50% of the total   loans. The maximum dollar amount     will be considered is $25 million
           project or $1,000,000.                 that SBA can guarantee has been      on aggregated B&I guaranteed
                                                  raised to $1,000,000. Low Doc        loan(s) offered to any one
                                                  loans are now considered to be       borrower. USDA Rural
                                                  those that are $150,000 (gross       Development encourages
                                                  amount) and smaller. The             applicants who may be eligible for
                                                  maximum guaranty on these loans is   assistance from the SBA to see if
                                                  now 85%. The maximum guaranty        such assistance is available from
                                                  on loans greater than $150,000 is    SBA. This program provides
                                                  75%. Previously, loans for more      guarantees up to 90% of a loan
                                                  than $100,000 received a maximum     made by a lender on existing
                                                  guaranty of 75%.                     businesses and 80% guarantees
                                                                                       made on startup businesses.
                                                  504 Loan Program includes:
                                                  * a loan secured with a
                                                  senior lien from a private sector
                                                  lender covering up to 50% of the
                                                  project cost
                                                  * a second loan with a junior
                                                    lien from the CDC/SBA (a
                                                    100% SBA-guaranteed
                                                    debenture) covering up 30-40% of
                                                  the cost
                                                  * a contribution of at least
                                                    10-20% equity by the
                                                    borrower.


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PROGRAMS   Texas Department of    Small Business                      United State Department   Accion Texas:
           Agriculture: Finance   Administration:                     of Agriculture: Rural
           Authority Rural                                            Business & Industry
           Development Finance                                        Program
           Program
DIRECT     N/A                    Direct loan are made only           N/A                       Individual loans range
 LOAN                             under SBA Disaster Loan                                       in value from $500-
                                  Program with proof of                                         $25,000. All
AMOUNT                            economic and/or physical                                      Individual loans require
                                  injury. These loans are based                                 collateral equal to the
                                  on the business financial need                                value of the loan, and a
                                  for up to 30 years at an interest                             co-signer may be
                                  rate of 4%. Loan amounts are                                  needed in some cases.
                                  base on a review of                                           Group loans: three to
                                  applications done by the SBA                                  five separate business
                                  Office.                                                       owners may apply for a
                                                                                                group loan with a
                                                                                                maximum first time
                                                                                                loan amount of $600
                                                                                                per owner. Group
                                                                                                loans do not require
                                                                                                collateral. However,
                                                                                                group members must
                                                                                                co-sign for one another,
                                                                                                each taking
                                                                                                responsibility for
                                                                                                another members
                                                                                                debt.




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PROGRAMS   Texas Department of                   Small Business                     United State Department              Accion Texas:
           Agriculture: Finance                  Administration:                    of Agriculture: Rural
           Authority Rural                                                          Business & Industry
           Development Finance                                                      Program
           Program
INTEREST   The rate approved by the Authority    7(a) loan and SBA Low Doc        Interest rates may be fixed or       14.5% fixed for the
  RATE     Board. The board will consider the    loan of $50,000 or more,           variable, negotiated between         first loan, 12.5% for
           minimum rate of low Wall Street       operate at 2.25% over the          lender and applicant, and normally   preferred customers
           Journal (Southwest Edition) prime     lowest WS prime rate for loans     do not exceed 1% over Wall          with excellent payment
           plus 2% floating as a base rate for   less than 7 years.                 Street Journal prime.                history with Accion
           the program.                                                                                                  Texas
                                                 For loans of seven years and up
                                                 2.75% over prime.

                                                 On 504 loans, the lenders
                                                 50% portion will be negiotiable
                                                 between borrower and lender.

                                                 CDC/SBAs 40% portion will
                                                 operate based on the current
                                                 market rate for 5 year and 10
                                                 year US Treasury issues + an
                                                 increment above the Treasury
                                                 rate based on the Treasury rate.




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PROGRAMS   Texas Department of                   Small Business                    United State Department              Accion Texas:
           Agriculture: Finance                  Administration:                   of Agriculture: Rural
           Authority Rural                                                         Business & Industry
           Development Finance                                                     Program
           Program
 TERMS     Determined on a case-by-case basis,   On 7(a) loans, the length of      The maximum terms are:               Terms of the loan range
           with a maximum of 20 years, not to    time for repayment depends on                                          from 5 months to 60
           exceed the life of the assets being   use of proceeds and the ability   30 years for real estate             months depending on
           financed. Owner(s) must provide at    of the business to repay:                                              the loan amount.
           least 25% equity of total project.    * usually 5 to 10 years on        15 years or useable life for
           For startup businesses 75% of the       working capital,                    equipment
           equity must be in the form of cash    * up to 25 years for fixed
           or cash equivalents. Loan must be       assets, such as the pur-         7 years for working
           secured by collateral sufficient to     chase or major renovation          capital
           provide reasonable assurance of         of real estate or the pur-
           repayment.                              chase of equipment (not to      All loans must have a fixed
                                                   exceed the useful life of       repayment schedule. Lines of
                                                   the equipment,                  credit and revolving loans are not
                                                 * lines of credit has a ma-       eligible.
                                                   turity of up to 5 years
                                                   based on needs of the
                                                   applicant

                                                 504 loan program is based on
                                                 10 and 20 year maturity.




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PROGRAMS   Texas Department of                    Small Business                   United State Department             Accion Texas:
           Agriculture: Finance                   Administration:                  of Agriculture: Rural
           Authority Rural                                                         Business & Industry
           Development Finance                                                     Program
           Program
  FEES     A non-refundable application fee of    The guaranty fee has been        A fee of 2% of the guaranteed       Processing fees up to
           $100 with the filing of the            modified as follows:             portion of the loan is payable to   3% of the individual
           application. Upon approval the         * If the total loan amount is    Rural Development when the          loans and 5% for group
           application fee will be considered a     150,000 or less, the           guarantee is issued. (A 1% fee      loans.
           part of the guaranty fee. A guaranty     guaranty fee is 2% of the      may be granted in some cases).
           fee of 1.50% of the guarantied           guarantee portion.
           amount of the loan is to be paid by      Lenders are permitted to
           the borrower. Closing costs,             retain 25% of this fee,
           including legal fees are the             which is equal to 50 basis
           responsibility of the borrower and       points.
           are due at closing.                    * If the loan amount is more
                                                    than $150,000 up to and
                                                    including $700,000 the
                                                    guarantee fee is 3% of the
                                                    guaranteed portion.
                                                  *If the loan amount is
                                                    $700,000 to $1,000,000 the
                                                    guarantee fee is 3.5%.
                                                    Lenders are not permitted to
                                                    retain any of this fee.




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PROGRAMS      United States Department of Agriculture:                     Texas Department of                        Texas Rehabilitation
              Farm Service Agency                                          Economic Development:                      Commission:
                                                                           Texas Capital Access Fund

ELIGIBILITY   Individuals, partnerships, joint operations, cooperatives,   A lender must submit a participation
                                                                                                                      TRC determines eligibility based on
              and corporations primarily and directly engaged in           agreement to be considered for
                                                                                                                      degree of verifiable disability. Must
              farming and ranching on family-size operations.              eligibility to enroll loans under the
                                                                                                                      be TRC client, and even then, TRC
              Individuals must:                                            program. To be eligible a borrower
                                                                                                                      prefers employment over self-
              * have satisfactory history of meeting credit obligations    must be: a small business (100 or
                                                                                                                      employment. Self-employment
              * have sufficient education, training, or experience         fewer employees); a medium business
                                                                                                                      considered when 1) it is the client's
                managing or operating a farm or ranch within 1of the       (100 to 500 employees); or a
                                                                                                                      choice and the comprehensive
                last 5 years and possess the industry and ability          nonprofit organization; domiciled in
                                                                                                                      assessment indicates a likelihood of
                needed to succeed in farming                               this state or having at least 51% of its
                                                                                                                      success, or 2) it meets the
              * be a citizen of the US or legal resident alien             employees located in this state.           employment objectives of certain
              * possess the legal capacity to incur the obligations of
                                                                                                                      carefully selected clients who, as a
                the loan
                                                                                                                      result of a disability, otherwise would
              * be unable to obtain sufficient credit elsewhere at
                                                                                                                      not be employed, or 3) it is the only
                reasonable rates and terms to finance actual needs
                                                                                                                      appropriate vocational objective
              * be the owner or tenant operating a family farm after
                                                                                                                      option (i.e. rural or remote areas with
                 the loan is closed.
                                                                                                                      limited employment resources.




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PROGRAMS   United States Department of Agriculture:                  Texas Department of                       Texas Rehabilitation
           Farm Service Agency                                       Economic Development:                     Commission:
                                                                     Texas Capital Access Fund
                                                                                                               Use of Funds: TRC does not make
USE OF     Funds may be used to: Purchase land and construct         Use of Proceeds may include working
                                                                                                               loans. They can, however provide
FUNDS      buildings or other improvements,                          capital or purchase, construction, or
                                                                                                               services for selected self-employment
           * soil and water conservation                             lease of capital assets, including
                                                                                                               clients. Some services which may be
           * purchase farm or ranch                                  buildings and equipment used by the
                                                                                                               provided are:
           * purchase livestock, poultry, equipment, feed, seed,     business. Refinancing of existing
                                                                                                                     Tools and equipment (can
             farm chemicals and supplies                             loans not originally enrolled under the
                                                                                                                          purchase new if not already
           * refinancing indebtedness with certain limitations       program, construction or purchase of
                                                                                                                          in TRC excess inventory)
                                                                     residential housing and simple real
           Direct Emergency loan funds usage: restore or replace     estate investments (excluding those             Consultation and Instruction
           essential property, pay all or part of production costs                                                       (can help with certain train-
                                                                     occupied by the applicants
           associated with the disaster year, pay essential family                                                       ing class fees, etc.)
                                                                     business), are ineligible uses of
           living expenses, reorganize the farming operation, and    capital access proceeds. Lines of               Initial Inventory and supplies
           refinance debts.                                          credit are permissible.                         Advertising
                                                                                                                     Utility payments (up to 6
                                                                                                                         months during the first phase
                                                                                                                         of the business)
                                                                                                                     Rent or lease payments (up
                                                                                                                         to $300, no more than 1st six
                                                                                                                         months)
                                                                                                               In all cases, TRC does not give
                                                                                                               money to the clients, but makes the
                                                                                                               check payable to the vendor. Like-
                                                                                                               wise, tools and equipment remain the
                                                                                                               property of the State and cannot be
                                                                                                               used as collateral or sold. Client is
                                                                                                               allowed to retain them as long as the
                                                                                                               business is in operation. Maximum
                                                                                                               local amount that can be approved is
                                                                                                               $2500 worth of services. Exceptions
                                                                                                               with the regional offices’ approval.


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                                                                                                                   Texas Rehabilitation
PROGRAMS   United States Department of Agriculture:                Texas Department of Economic
                                                                                                                   Commission:
           Farm Service Agency                                     Development: Texas Capital
                                                                   Access Fund

GUARANTY   Direct Farm Ownership loan and Direct Operating         State Contribution: an amount equal to the
                                                                                                                   Guaranty Amount: N/A
 AMOUNT    loan maximum is $200,000.                               combined contribution of the borrower and
                                                                   lender, if the lender has: (1) assets of more
           Maximum loan amount for Beginning Farmer Down           than $1 billion; or (2) has previously
           Payment Ownership is the lesser of 30% purchase         enrolled loans under the program of more
           price appraised value.                                  than $2 million.

           Direct Emergency maximum loan amount is 100%            If a lender does not meet either #1or #2
           physical loss 80% actual loss. $500,000 is the          listed above, the state contribution will be
           maximum program indebtedness.                           150% of the combined contribution of the
                                                                   borrower and lender.
           Guaranteed operating and guaranteed farm
           ownership maximum loan amount is $762,000               If the borrower meets one of the following
           (Amount adjusted annually for inflation).               criteria the state contribution will be 200%
                                                                   of the combined contribution of the
           The USDA Farm Service Agency guarantees up to           borrower and lender: 1) Locating in or
           90% of the total project cost (95% in certain cases).   financing a project in an enterprise zone. 2)
           Thus, the lenders exposure on the loan is 10%.         small or medium sized business, or a
           Farm Service Agency will set the amount.                nonprofit organization, that operates or
                                                                   proposes to operate a day-care center. 3)
                                                                   Borrower injects 2 to 3% of the loan
                                                                   amount.

DIRECT     Direct Farm Ownership loan and Direct Operating         The state contribution may not exceed 8%
                                                                                                                   TRC purchases services for the
LOAN       loan maximum is $200,000.                               or $35,000 of the loan to businesses located
                                                                                                                   client. It is not a loan.
                                                                   in enterprise zones or for day-care
AMOUNT     Direct Emergency maximum loan amount is 100%            providers. The limits are 6% or $35,000 for
           physical loss 80% actual loss. $500,000 is the          any other applicant.
           maximum program indebtedness.
                                                                   The states maximum contribution to a
                                                                   reserve account for any single loan recipient
                                                                   may not exceed $150,000 during a 3 year

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period.




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                                                                                                    Texas Rehabilitation
PROGRAMS         United States Department of               Texas Department of
                                                                                                    Commission:
                 Agriculture: Farm Service                 Economic Development:
                 Agency                                    Texas Capital Access Fund

 INTEREST RATE   Direct Farm Ownership interest rates      Loan terms are determined by the
                                                                                                    N/A
                 are based on Agency borrowing costs.      lender. There is no minimum or
                  Temporary limited resources interest     maximum loan amount, only a
                 rates are available for those unable to   maximum amount that the state will
                 repay at regular rates. 5% interest       provide to the financial institutions
                 rate if 50% of loan amount provided       reserve fund.
                 by other lender.

                 Beginning Farmer Down-payment
                 Ownership interest rate is 4%.

                 Direct Operating interest rates are
                 based on Agency borrowing costs.
                 Temporary limited resources interest
                 rates are available for those unable to
                 repay at regular rates.

                 Direct Emergency interest rate is
                 3.75%

                 Guaranteed Operating interest rate are
                 rates not to exceed those charged
                 lenders average farm customers. 4%
                 reduction available for those unable
                 to repay at regular rates.

                 Guaranteed Farm Ownership interest
                 rate are also
                 rates not to exceed those charged
                 lenders average farm customers.



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                                                                                                         Texas Rehabilitation
PROGRAMS               United States Department of              Texas Department of
                                                                                                         Commission:
                       Agriculture: Farm Service                Economic Development:
                       Agency                                   Texas Capital Access Fund

      TERMS            Direct Farm Ownership terms is up to     Loan terms are determined by the
                                                                                                         Client retains “services” purchased
                       40 years.                                lender. There is no minimum or
                                                                                                         by TRC as long as the business is in
                                                                maximum loan amount, only a
                                                                                                         operation. If the business closes,
                       Beginning Farmer Down-payment            maximum amount that the state will
                                                                                                         TRC assets must be turned back in
                       Ownership terms are up to 10 years.      provide to the financial institutions
                                                                                                         to TRC.
                                                                reserve fund.
                       Direct Operating terms are from 1 to
                       7 years.

                       Direct Emergency terms are 1 to 7
                       years for non-real estate purposes and
                       up to 40 years for real estate
                       purposes.

                       Guaranteed Operating terms are 1 to 7
                       years. Lender sets the terms.

                       Guaranteed Farm Ownership terms
                       are up to 40 years. Lender sets the
                       terms.

       FEES            Direct loans require a credit report     Normal and customary fees may be
                                                                                                         N/A
                       fee. Depending upon loan programs        charged by the lender. No additional
                       and purposes there are recording fees.   fees are charged by the state.




 Sul Ross State University Big Bend Region Minority & Small Business Development Center
                                        Loretta Garcia

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