Small Business 504 Loans Appalachian Development Corporation

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1 Volume 10 Issue 3 November-December 2007 Small Business 504 Loans Appalachian Development Corporation his is the second article in the series on the loan programs of the Appalachian Development Corporation (ADC). This time we will be reviewing the Small Business Administration 504 loan program. The ADC is a Certified Development Corporation with SBA, a requirement to participate in this Federal program. With the 504 loan program, our primary service area is the Upstate s six counties; however, we are also able under this program to consider loans in the remainder of the State. The SBA 504 loan program is designed to finance only fixed assets: land, buildings, and equipment. It does not provide for any working capital funds. This loan format still follows the general parameters as set forth in a previous article (see Sept-Oct Viewpoint). The ADC operates as a gap financing entity working in conjunction with a local financial institution that provides the primary financing on the project. Again, the typical structure for existing businesses is a commercial bank loan of 50%, a 504 loan for 40%, and borrower contribution of 10% of the total project cost. This will be adjusted in the case of a start-up business (one that is less than two years old), with the borrower contribution increasing to a total of 15% and the SBA 504 loan decreasing to 35% of the total project cost. On projects where the building is a single purpose facility (marinas, motels, car washes, etc.), there is also an additional 5% borrower contribution requirement. Under the 504 loan program, the bank s portion will Budget and Control Board Loans for Water and Sewer n article in the May-June issue of Viewpoint contained information about two programs offered by the State Budget and Control Board the State Revolving Fund (SRF) for Wastewater and the SRF for Drinking Water. These programs are again Palmetto Graphics Inc., recently secured a Small Business (SBA) 504 loan to purchase a powerful fivecolor commercial printer. generally be at the 50% level, with the 504 portion ranging from 30% to 40%, and the borrower contribution being in the 10% to 20% range. The maximum SBA 504 loan is normally $1,500,000. This can be increased to $2,000,000 if the project meets certain community development or public policy goals set by the Small Business Administration regulations. It can be further increased to $4,000,000 if the project involves a manufacturing company. Terms of a SBA loan are either 10 years for equipment or 20 years for real estate. Interest rates are fixed for the term of the loan and are set at the time the debenture is sold to fund the SBA portion. Pricing for SBA 504 is based upon a debenture that is sold in the financial markets after all construction and renovation on project assets are completed. At the time a borrower accepts the 504 loan, the actual interest available for FY-08, but the interest rates have been reduced as follows: Standard Rate Applies to all systems with more than 10,000 population, and all borrowers with Median Household Incomes (MHI) greater than $37,082 (2000 State MHI), regardless of size. Interest rates reduced from 3.5% to 3.25% (for wastewater) and 3.0% (for drinking water). Small System Rate Incentive rate for small systems and take over of non-viable systems. Interest rates reduced from 2.5% to 2.25% (for wastewater) and 2.0% (for drinking water). (ADC continued on page 3) (Loans continued on page 3)

2 Page 2 ACOG Welcomes New GIS Analyst The Information Services Department is excited to welcome Amy Wright Webber as the ACOG s new GIS Programmer/Analyst. Amy fills the position vacated by Ann Sommer last year. A native of Greenville, Amy returns after working seven years for Bradshaw Consulting Group (BCS) in Aiken. While at BCS, Amy s initial responsibilities included GIS user support, ESRI and custom GIS training and assisting clients with custom projects and development. She was promoted in her final two years to Technical Project Manager for one of the primary BCS product lines. Prior to BCS, Amy spent six years with the City of Greenville. While there she worked as a GIS Analyst to grow the user base within the city through ESRI Authorized training, customized training, use of ArcView software, and customized programming projects for those with specific task needs. I am very proud to say that there were well over 200 active users of the system throughout the departments before I left to go to BCS, says Amy. Amy s professional past also has ties to the COG. Approximately 12 years ago, she was hired by ACOG to help develop EDIS, the precursor to InfoMentum, the regional economic development decision support system. As an interesting side note, current Information Services Director Carol Andersen was initially hired by the COG to replace Amy when she left to work for the City of Greenville. In 1991 Amy earned a BA in Business and Finance from St. Andrews College in Laurinburg, N.C. She held minors in Equestrian Science and English. While a student at St. Andrews, Amy spent three semesters abroad in Greece, England, Scotland and Northern Italy. After graduation, Amy went to Montana as a volunteer for the U.S. Forest Service. She worked as a wilderness ranger for four months in the Rocky Mountains Scapegoat Wilderness area. Amy recalls, I was dropped off at a trailhead on Tuesday with a horse and a pack mule then picked up 5 days later at a different trailhead. My job was to check trail conditions, count people, clear the trail, and call for emergency medical copters if needed for any visitors. Amy also completed two years of graduate school at Clemson University s Masters Program in Parks, Recreation and Tourism. Amy s immediate family includes husband Jason, son Iain, two dogs, three cats and two horses. She is excited about returning to live on the family farm that was her childhood home from the age of 6. She fondly recalls helping her dad build the house over a period of several years. When she finds spare time, Amy enjoys hanging out with family and pets. At one time, she was an active participant in Aikido and Judo clubs, and she even met her husband while at a Judo club meeting. She hopes to resume participation in Aikido (a Japanese marital art), as time permits. When asked about her plans for her new position, Amy says, I am looking forward to the many upcoming projects here at the COG from upgrading and expanding existing applications such as InfoMentum and Plan-aBiz to the latest GIS technology. I also plan to continue the ESRI Training program. I have missed getting to actually work in the programming languages and am greatly looking forward to the work. Family Caregiver Outreach ACOG Family Caregiver Advocate Debra Brown spoke at the National Kidney Foundation Conference in October. A critical part of ACOG s Family Caregiver Support Program is training and interaction with clients and the community. Since the Appalachian Area Agency on Aging is the hub of activity for six counties: Anderson, Cherokee, Greenville, Oconee, Pickens and Spartanburg Counties, caregiver advocates look for every opportunity to go out into the region to teach and support those whom they serve. In October Caregiver Advocate Debra Brown spoke at the National Kidney Foundation's Patient's Conference in Greenville. Debra addressed 150 patients, families and caregivers on ways of dealing with the various aspects of kidney diseases. The conference addressed numerous resources available to families and caregivers. Education on all fronts is essential to the success of caregivers. For any information on the Family Caregiver Support Program, or if a meeting speaker is needed, please contact Debra Brown at brown@scacog.org, or Sam Wiley at swiley@scacor.org, or phone , or toll free The Caregiver program provides information, assistance to caregivers in gaining access to services in the area, counseling, organization of support groups, training, limited, short-term financial assistance with respite care and supplemental supplies such as incontinent supplies, supplemental nutrition and other needs.

3 Page 3 WorkLink Matching South Carolina Workers, Skills, and Jobs ccording to a survey conducted by Area Development magazine, a skilled workforce is among the top decision criteria for corporate relocation. The South Carolina Department of Commerce and the Governor s State Workforce Investment Board recently launched a statewide nationally affiliated Career Readiness Certificate program based on a system known as WorkKeys to assess workforce skills. WorkKeys is a job skills assessment system measuring real world, practical skills that employers believe are critical to job success. These skills are applicable across numerous occupations and span all educational, professional, and skills levels. WorkKeys is a powerful tool that allows business to assess employee skills and profile jobs to determine specific skills needed. This coupled with our nationally recognized worker training program, readysc, gives South Carolina the ability to recruit industry with the confidence that we can provide a skilled workforce to meet specific industry needs, said Joe Taylor, Secretary of Commerce. While the WorkKeys program has been utilized by numerous businesses across South Carolina for over 10 years, the launch marks the first statewide, nationally affiliated Career Readiness Certificate. The statewide application of the program creates a common language that will immediately identify skill levels of job-seekers and communicate those skills to business and industry. Additionally WorkKeys will assist South Carolina s workforce, business, and industry by: Identifying a skilled workforce for prospective industry considering locating in South Carolina. Creating a united effort to verify workforce quality by giving businesses a uniform skills language. Enabling workers to have a certificate of identifiable and specific skills. Offering business and industry the ability to create a job profile based on specific needs. Statewide coordination also enables the state to have a central database of skills. Access to that database with South Carolina WorkKeys scores also begins today and is available at Aggregate scores can be explored by region, county, or statewide, giving prospective employers a means by which to determine a location that will accommodate the company s workforce needs. The WorkKeys Career Readiness Certificates are already recognized by over 250 employers in South Carolina as well as employers in 40 states. The certificate gives employers the ability to match scores on the test with specific skill levels needed to confidently hire a ready-towork employee. Over 55,000 South Carolinians have already qualified for a WorkKeys certificate. In fact, South Carolina is the third largest user of this system in the nation. For information on the program, testing locations, learning the process of having a job profiled within a company, visit The WorkLink Workforce Investment Board is currently using WorkKeys in many of its programs. For more information on job profiling or skills assessment, contact ACOG s WorkLink office at (ADC continued from page 1) rate is undetermined. Normally rates are at, or below, market rates. Loan fees associated with the SBA 504 loan generally run in the 2.5% to 3.0% range and are financed in the transaction as part of the overall project cost. Eligible project costs consist of land costs, building costs, equipment costs, and related costs such as legal costs, appraisals, environmental reports, interim interest, etc. For information concerning the SBA 504 program, contact David Mueller or George Long at the Appalachian Development Corporation. (Loans continued from page 1) Hardship Rate Available to systems less than 10,000 population; system MHI is less than State MHI; and Level of Effort (LOE) at least 1.3%. (LOE is annual cost of sewer or water based on 6,000 gallons monthly usage divided by system MHI). Interest rate unchanged at 1.0% for wastewater or drinking water. The Budget and Control Board is also offering the State Infrastructure Revolving Fund (SIRF). This program can fund those projects not eligible under the SRF programs, small projects under $200,000, and projects where the borrower s credit quality is too weak for the SRF programs. The small loans have a very streamlined process. Because this program is state-capitalized, it carries no federal requirements. There are also no associated loan fees. The interest rates are 3.5% (Standard Rate), 2.5% (Small System Rate), and 1% (Hardship Rate). For further information on these programs, contact Ms. Trish Comp at the S.C. Budget and Control Board in Columbia at , or Dirk Reis at the ACOG.

4 Page 4 Easley Comprehensive Plan Update he City of Easley has kicked off an effort to update their Comprehensive Plan. The plan was originally adopted in 1999 and reviewed in The city is updating the plan in an effort to identify strategies that address and implementation strategies through the spring of For more information concerning Easley or Comprehensive Plan updates, please contact Chip Bentley with the Council of Governments. Caregiver Program Update In Upstate cities such as Easley, growth will occur with or without a plan. the challenges associated with the growth of the community. Over the past several years, Easley has become an attractive location for newer, mixed use developments with a mix of land use activities and wider range of residential subdivisions. This growth has had both positive and negative impacts on the community. The planning process provides residents and community leaders in Easley the opportunity to provide input and establish a vision for future development and strategies to guide growth. South Carolina law requires regular comprehensive plan updates. The process in Easley has begun with the Appalachian Council of Governments facilitating a series of public meetings to solicit information from the city s residents. The Planning commission will use the citizen input along with analysis of existing conditions and trends to identify opportunities and challenges the city will face in the next 20 years. Strategies will then be developed to address these issues so that Easley will continue to grow and prosper in ways that benefit the community. The Appalachian Council of Governments will continue to work with the City of Easley with the development of the plan ACOG s Family Caregiver Support Program (FCSP) has completed another highly successful year of outreach to the caregivers in the sixcounty area. The amount of $191,815 was appropriated for use by the FCSP to provide for respite and supplemental services for caregivers. With that money the FCSP was able to serve 764 caregivers of seniors and 59 seniors rearing children. The program spent over $88,000 for respite and the balance in supplemental assistance and in use of caregiving kin raising children. As of July 1, 2007, the FCSP has been appropriated over $188,000 for respite and supplemental services and an additional $9,000 to specifically be used for the care of Alzheimer s care recipients in our Upstate area. This program is extremely efficient and cost-effective. ACOG s FCSP continues to receive assistance requests daily. Already this fiscal year, the program has helped 508 caregivers and 47 seniors (Caregiver continued on page 5) Pacolet Town Council Retreat The Pacolet Town Council at their annual strategic planning retreat. Planning makes the difference between watching things happen and making them happen. The Pacolet Town Council recently conducted an all-day Saturday strategic work session to address challenges and long range plans for the community. The meeting provided Council with an opportunity to think proactively and look past the day-to-day business of running a small city. The retreat was facilitated by ACOG staff. Council members discussed the town s Master Plan, growth, annexation, economic development and land use planning. The council also established both short and long term goals and objectives for their community. In the past few months ACOG has facilitated planning sessions with city councils from Pickens, Easley, Mauldin, Inman, Gaffney, Belton and Williamston. ACOG has also facilitated retreats and training sessions for a number of special purpose boards and commissions. Contact Joe Newton or Donna Kazia for further information on retreats and training. Did you know? The first predecessor of the Appalachian COG was known as the South Carolina Appalachian Advisory Committee, formed by Governor Robert McNair in 1965.

5 Appalachian Council of Governments P. O. Box 6668 Greenville, South Carolina PRSRT STD U.S. POSTAGE PAID GREENVILLE, SC PERMIT NO Address Service Requested (Caregiver continued from page 4) raising children. There are also currently 170 caregivers that are waiting to receive grant assistance for respite or supplemental services. Along with providing small grants for caregivers, the advocates are able to offer information, counseling, access to support groups relative to the situation, training and education suited to specific needs, information and assistance regarding available resources and community outreach. The Family Caregiver Advocates may be reached by calling , or toll-free The addresses are and Please call or write for any information related to this beneficial program.