• Loans to local microenterprise and community revolving loan programs (for making loans to small / micro businesses) Evergreen Loan Application
• Recoverable pledges for loan loss reserve
• CD Guarantee Pledges for Nebraska banks that loan to micro businesses

• Grants to small or micro businesses
• Equity investments

It is anticipated that its financial products may be modified as NEF gains experience, further capitalizes its loan fund, and gains a clearer understanding of the market. All loan terms, therefore, are subject to change. NEF reserves the right to reduce or increase maximum loan amounts, terms of renewal, interest rates and repayment structures.

EVERGREEN LOAN for Program Borrowers

Evergreen Loan Application

The Nebraska Enterprise Fund’s Evergreen loan program serves the following types of borrowers:   Any local non-profit or public sector organization that provides microenterprise loans to small businesses in Nebraska. Loan Purposes The Nebraska Enterprise Fund’s Loans may be used by the borrowing organization(s): To finance new business startups; To expand or strengthen existing businesses; To attract or leverage other financial resources; To meet loan loss reserve requirements (non-NEF loan capital sources).

Loan Purposes

The Nebraska Enterprise Fund’s Loans may be used by the borrowing organization(s):

• To finance new business startups;
• To expand or strengthen existing businesses;
• To attract or leverage other financial resources;
• To meet loan loss reserve requirements (non-NEF loan capital sources). 

Ineligible Uses

1. Relending or investing in stocks, bonds, or other securities or for purchase of property not intended for use in production by an individual micro business-borrower;
2. Refinancing a non-performing loan held by a financial institution;
3. Using for any illegal purpose;
4. Paying the operating expenses of micro lending organizations; however, interest income earned from relending principal to micro businesses may be used for operating expenses.

Mission:	It is the mission of the Nebraska Enterprise Fund (NEF) to make sure that Nebraska micro and small businesses have access to capital, training and technical assistance.
Project Eligibility:	NEF is open to working with lending programs that are current micro-lending organizations or plan to make micro loans to Nebraska small businesses in the next six months. Eligible organizations must be a legal entity with the legal capacity to enter into a loan contract. Typically the organization will be a non-profit corporation.
Loan Purposes:	1) The purpose of NEF Evergreen loans is to provide lending capital to enable non-profit lending organizations to make small business loans or “micro loans” (business loans under $35,000) to “micro businesses” (five or fewer employees) located in Nebraska. NEF loan capital may be used for a loan packaged in participation with other lenders (banks or other micro lenders). $35,000 loan limit still applies, however with multiple lenders, total package may be up to $105,000.  2) The purpose of the NEF Loan Loss Reserve Loan or Certificate of Deposit is to serve as collateral for loan loss reserve accounts for programs to use in meeting loan loss reserve requirements from non-NEF loan capital sources. Loan or pledge amounts to programs will vary based on loan program requirements.
Loan Terms:	NEF Evergreen Loans to programs are typically up to $100,000 per loan (borrowers may have more than one loan at a time). Interest only payments to NEF monthly via ACH. Five years, renewable, no limit on renewals with positive loan performance. Interest rate may be adjusted upon renewal.  NEF reserves the right to reduce or increase maximum loan amounts, terms of renewal, interest rates and repayment structures.  NEF Loan Loss Reserve loan /pledge terms will be determined on a case by case basis depending on the loan terms of the non-NEF loan program sources.
Borrower Eligibility:	Local nonprofit microenterprise support organizations and community revolving loan programs that make loans to start-up and existing micro businesses. Eligibility checklist includes experience in lending, performance of loan pool (number of loans, default, delinquency), stability of staff, key staff qualifications, timely reporting to NEF in past, milestones /goals, most recent audit and financial statements, and references.
Technical Assistance:	Borrower agrees to provide pre- and post- loan technical assistance to business borrowers, either with their own staff or contracting with an existing microenterprise development program.

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CD GUARANTEE PRODUCT FOR BANK LOANS 

Nebraska Enterprise Fund: Summary of Program Loans + CD Guarantee for Banks
Type of Loan	Maximum Loan Amount	Maximum Term	Interest Rate	Notes:
3. NEF CD Guarantee	Up to $30,000 or 50% of bank loan, whichever is less.	3 years (Initial year + two annual renewals).	Annual fee to business borrower, and NEF collects interest on CD in the bank (current annual CD rate).	This is a credit enhancement product with NEF working directly with banks and their underwriting criteria. CD amount is an add’l loan to borrower from NEF. Pledge agreement between bank, borrower and NEF.

               

CD Guarantee – a Security Pledge:

It is the mission of the Nebraska Enterprise Fund (NEF) to make sure that Nebraska micro and small businesses have access to capital, training and technical assistance.

Project Eligibility:

NEF’s cash guarantee is a loan from NEF to a business borrower to back a bank loan for the business. The certificate of deposit is owned by NEF and pledged as security to the bank to back a specific designated business loan to the bank customer. The bank pays NEF the current 12-month CD rate. Borrower pays an annual fee to NEF (2 % of the CD amount or $400 minimum fee) on the CD amount. Borrower is liable for the CD amount (interest and principle) if the bank loan goes into default and the bank uses the CD to cover their losses.

For more details, NEF encourages Nebraska business bankers to contact NEF.

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