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Home My WebLink AboutPR 19763: EDC, CONTRIBUTE TO GROW AMERICA FUND Interoffice MEMORANDUM To: Mayor, City Council, City Manager From: Floyd Batiste, CEO Date: May 16, 2017 Subject: P. R. No. 19763; Council Meeting of May 23, 2017 ATTACHED IS PROPOSED RESOLUTION NO. 19763 A RESOLUTION AUTHORIZING THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION TO CONTRIBUTE AN ADDITIONAL $115,000 TO THE GROW AMERICA FUND (GAF) TO MAINTAIN $4,000,000 IN ITS SBA GROW PORT ARTHUR LOAN PORTFOLIO AND TO ADMINISTER THE CITY OF PORT ARTHUR CONTRIBUTION OF $115,000 TO GAF FUNDS FOR A SMALL BUSINESS MICRO-LOAN PROGRAM. PAEDC FUNDING ACCOUNT NO. 120-1429- 582.59-01. P. R. No. 19763 5/2/2017 FB RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY OF PORT ARTHUR SECTION 4A ECONOMIC DEVELOPMENT CORPORATION TO CONTRIBUTE AN ADDITIONAL $115,000 TO THE GROW AMERICA FUND (GAF) TO MAINTAIN $4,000,000 IN ITS SBA GROW PORT ARTHUR LOAN PORTFOLIO AND TO ADMINISTER THE CITY OF PORT ARTHUR CONTRIBUTION OF $115,000 TO GAF FUNDS FOR A SMALL BUSINESS MICRO-LOAN PROGRAM. PAEDC FUNDING ACCOUNT NO. 120-1429-582.59-01. WHEREAS,per Resolution 06-425, the City Council approved an agreement between the City of Port Arthur Section 4A Economic Development Corporation("PAEDC")and The National Development Council for the Grow Port Arthur Fund; and WHEREAS,per Resolution 06-425,the City of Port Arthur also entered into an agreement for the administration of its Revolving Loan Program that was administered by PAEDC; and WHEREAS,at the PAEDC Board of Directors regular meeting on May 1,2017,the Board authorized its Chief Executive Officer to fund the Port Arthur Grow America SBA Loan Program (the "Program") by an additional $115,000 so City funds in the amount of$115,000 could be transferred from the Program to fund a Small Business Micro-Loan Program (the "Micro-Loan Program"); and WHEREAS,at the PAEDC Board of Directors regular meeting on May 1,2017,the Board requested the City Council authorize its Chief Executive Officer to manage the City's funds transferred to the Micro-Loan Program under the Micro-Loan Program guidelines as outlined in Exhibit"A"; and WHEREAS, at the PAEDC Board of Directors regular meeting on May 1, 2017, the PAEDC Board approved the Micro-Loan Program Application as shown in Exhibit "A". NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PORT ARTHUR, TEXAS: Section 1. That the facts and opinions in the preamble are true and correct. Section 2. That PAEDC is herein authorized to contribute an additional $115,000 to the Grow America Fund (GAF) to maintain $4,000,000 in the Program loan portfolio and to administer the City Micro-Loan Program as shown in Exhibit "A". Section 3. That a copy of the caption of this Resolution shall be spread upon the Minutes of the City Council. READ, ADOPTED AND APPROVED on this day of A.D., 2017, at a Meeting of the City Council of the City of Port Arthur, Texas, by the following vote: AYES: Mayor Councilmembers • NOES: Derrick Freeman, Mayor ATTEST: Sherri Bellard, City Secretary #1383159 Page 2 APPROVED: Floyd Batiste, P"EDC C 0 APPROV It AS TO FORM: r Guy N. Goodson, PAEDC ey APPROVED AS TO FORM: Nd Valecia R. Tizen , City Attorney #1383159 Page 3 Exhibit "A" Port Arthur Economic Development Corporation Small Business Micro-Loan Program The Port Arthur Economic Development Corporation (PAEDC) Small Business Micro-Loan Program will support entrepreneurial and small business endeavors, which is the backbone of our local economy. The PAEDC Micro Loan Program will provide a direct funding source for qualifying small businesses in the City of Port Arthur that have the ability to repay a loan, but may not be able to obtain financing through traditional sources. The PAEDC Micro-Loan Program will be designed to assist small Port Arthur for-profit business owners by providing loans to establish or expand businesses in the City of Port Arthur and help ensure success over time. Program Goals: • Encourage business ownership and self-employment as a means of economic self-sufficiency • Bridge the gap for businesses which might eventually qualify for bank financing and prepare them for traditional bank relationships • Facilitate job creation and retention for low and moderate income residents of the community who are employees of small businesses that would access the fund • Foster diversity in the business community by encouraging business ownership among ethnic minorities, women, and the disabled • Promote entrepreneurship and business innovation as a means of harnessing the creative potential of small business and investing in the economic success of the community Loan FAQ's: • Loan terms will be 1 to 3 years • Interest rate will be a fixed rate of prime plus 1 • No penalty for pre-payment of the loan • Collateral will be taken equal to 100%of the loan to secure the note • An individual credit score of 600 or higher or a co-signer will be needed with an individual credit score of 650 or higher • Applicant must be a for-profit business located in the city of Port Arthur with annual gross revenues of less than $150,000 Approved loans may be used for: • Equipment • Increasing Inventory • Marketing • Working Capital • Site Improvements 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T:(409)963-0579 F: (409)962-4445 -www.paedc.org • x> Port Arthur Economic Development Corporation a� Applicants will be required to provide the following information: • Credit Bureau Report (within the past 30 days) • Copy of Driver's License • Business Plan • Proof of Business Ownership • Copy of last three years tax returns (personal and business) • Profit and Loss Statement • Balance Sheet • Accounts Receivable/Accounts Payable • Collateral equal to 100% of the loan Maximum funding limits are based on gross revenues: • Gross revenues of less than $20,0000 $15,000 • Gross revenues between $20,001 to $40,000 $20,000 • Gross revenues between $40,001 to $60,000 $25,000 • Gross revenues of more than $60,000 $30,000 A loan committee will be established to consider all applicants. PAEDC will be responsible for administering and monitoring the distributed funds. PAEDC will make a visit to each applicant business once the application has been received. Approved applicants will be required to sign a promissory note in the event of default.Applications and accompanying documentation will be reviewed for financial stability. Financial security and financial viability will be a contributing factor in the approval of fund disbursement. Incomplete applications will not be reviewed. Applications will be available for download through the PAEDC website: www.paedc.org 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T: (409)963-0579 F: (409)962-4445 -www.paedc.org Port Arthur Economic Development Corporation Small Business Micro-Loan Application Thank you for contacting Port Arthur Economic Development Corporation (PAEDC) for a Small Business Micro-Loan! The basic steps in applying for the Micro-Loan are: - Send your completed Micro-Loan Application to the PAEDC and set up a meeting with our Loan Officer/Technical Advisor. - Bring each of the items in Part I on the back page of the Micro Loan Application to your meeting. We will discuss your application materials with you, answer questions that you have, and tell you what information is still needed. Once your application is ready, you will need to pay$10 for processing (Non-Refundable). When our Loan Officer has received all of your information, (s\he) will prepare and present a report to the Loan Review Committee. In making its decision, the Committee will study your: 1. Credit History. A person with a score of 600 or more does not need a co-signer. Do you pay your debts on time? Do you have judgments or bankruptcies? 2. Business Plan. What is your business idea?What items or services will you sell? What experience do you have in this or related types of business? Have you ever managed a business? How will you compete and market your business?What will be your monthly expenses and sales revenues for one year? 3. Collateral. We expect you to provide collateral equal to 100%of the loan. Examples include liens on an unfinanced vehicle, business assets, home equity, equipment, machinery,jewelry, and even cash. If you are unable to provide collateral,you will need a co-signer who has a credit score of over 650, collateral and/or moderate income with employment history of more than 2 years and who would be able to pay your loan balance if necessary. Please understand that SBDC can work closely with you to build a strong business plan so that your business will be successful. 4. Cash Contribution to the Business. You are expected to invest the remaining funds from your own savings. We look forward to working with you! 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T: (409)963-0579 F: (409)962-4445-www.paedc.org Port Arthur Economic Development Corporation GENERAL INFORMATION Name: Social Security No. (Last) (First) (Initial) Address: Years at this address: Tel. Numbers: Home Cell Work Spouse's Name: . Address (if different than Current Address): Nearest Relative (not living with you): Relationship: Address: Telephone: EDUCATION Highest Educational Degree (circle one): Middle School High School Associate BA/BS Master/Ph.D (Enter the year received): Type of Degrees Earned: WORK EXPERIENCE (or provide a resume with your application) Current Employer: Address: Salary: Job Title: How Long There: Duties: Supervisor's Name &Telephone: 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T: (409)963-0579 F:(409)962-4445-www.paedc.org .." Port Arthur Economic Development Corporation .r,.ys,., Previous Employer: Address: Salary: Job Title: How Long There: Duties: Reason for Leaving: Supervisor's Name &Telephone: LOAN REQUEST INFORMATION Loan Amount Requested:$ . Term Requested (circle one): 1 yr./ 2 yrs/3 yrs. Purpose How much money will you provide from your own funds?$ If your loan request is $20,000+, have you tried to get a bank loan and been turned down?Yes No PERMISSION TO OBTAIN YOUR CONSUMER CREDIT REPORT I hereby give the Port Arthur Economic Development Corporation the right to obtain my consumer credit report for this application and for the life of the loan, should my application be approved. I also release from all liability all persons, companies, and corporations supplying such information. I indemnify the Port Arthur Economic Development Corporation against any liability, which might result from making such an investigation. Name SSN: (Last) (First) (Initial) _I___/ (Date of Birth) (Signature) (Date) 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T. (409)963-0579 F: (409)962-4445-www.paedc.org 4 Port Arthur Economic Development Corporation INFORMATION ABOUT BUSINESS (A business plan including expected monthly revenues&expenses for 1 year will be requested later.) Business name and address: County: Is this a new business? Yes No Date started / / . Or,an existing business?Yes No Date started / / . Organization type: Sole Proprietorship Partnership LLC S Corp. C Corp Your products/services: REFERENCE Name Relationship to You Address Telephone Are you currently six months or more behind in paying child support, as part of a court ordered agreement? yes no Closing Costs Loan Amount Closing Costs $5,000-$10.000 $100 $10,001 - $20,000 $150 $20,001 -$25,000 $200 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T: (409)963-0579 F: (409)962-4445 -www.paedc.org Port Arthur Economic Development Corporation Certification Statement I certify that the information above is correct to the best of my knowledge. I authorize PAEDC to make inquiries as necessary to verify the accuracy of the statements made by me and to determine my creditworthiness. I have read and understand the costs outlined above. I agree to indemnify and hold harmless PAEDC, its officers, directors, employees, and agents from any and all claims, loss or other liability arising from or related to the services that PAEDC provides before, during, and after the loan review process. I agree to pay the required sums and I agree to be bound by the loan agreement, if my application is accepted. Applicant Signature: Date: For PAEDC Internal Use: Date Application Received: Received by: 501 Procter St.,Ste. 100, Port Arthur,TX 77640 T: (409)963-0579 F: (409)962-4445-www.paedc.org Port Arthur Economic Development Corporation Items you will need to provide: PART I In addition to this application, bring the following to your meeting with our loan officer. • $10(non-refundable) • Solid co-signer, if your credit score is under 600. • Business Plan, including expected cash revenues and expenses, by month, for one year. • Federal Tax returns for the last 3 years. • Two forms of identification: (one must have your picture). If U.S. Citizen, passport, birth certificate, voter Id. card or Certificate of Naturalization. If refugee/asylee, 1-94 or Green Card. • Personal Financial Statement. We have an SBA form for you to fill out. • 3 Most recent bank statements and pay stubs. • Personal or commercial driver's license and driving record if vehicle is to be purchased with the loan or is important to the business. • For an existing business: income statement, balance sheet, and Federal business tax returns, all for the last 3 years. • For a start-up business: Last 3 years personal Federal Tax Returns • If a co-signer is needed—completed micro-loan application, credit history, personal Federal tax returns for last 3 years, and two I.D.'s, proof of being moderate income. • If a co-signer is needed—3 recent bank statements, recent pay stub, collateral statement, and proof of ownership of any collateral. PART II If the loan receives preliminary approval,you will have to provide the following information. • Proof of ownership of collateral. If real estate is collateral, a copy of deed of trust. [PAEDC will order a title search and place all liens at your cost]. If a vehicle is collateral, a copy of thetitle. • Business registration form (sole proprietorship) or Articles of Incorporation w/ list of all shareholder/owners. • Copy of all required licenses and permits.Applicants should secure a home occupancy/trade name registration from respective domicile (County, City, etc.) when applicable (trucks, home-based, etc.). • Purchase orders or invoices for items to be purchased. • Copy of lease (if applicable)—lease term must be equal to or exceed the term of the loan. • Mechanical check for vehicles to be purchased or used as collateral. • Personal or commercial driver's license and driving record if vehicle is to be purchased with the loan or is important to the business. • Proof of business insurance—copy of policy (PAEDC will be loss payee on policy). • Evidence of your contribution to your project. • Other information that may be applicable to a particular loan application. 501 Procter St., Ste. 100, Port Arthur,TX 77640 T: (409) 963-0579 F: (409) 962-4445 -www.paedc.org