NEF
Business Loan
Small / Micro Business Financing
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In 2010, NEF began formalizing policies to help fill loan capital gaps to micro businesses throughout Nebraska with the use of participation loans and two collaborative loan products, - 1) micro Level 1 loan and 2) NEF Level 2 loan.
NEF will consider Participation, Level 1, or Level 2 loans direct to micro businesses, based only on loan referrals from and in participation with
NEF Program Partner organizations.
NEF is also offering a
credit enhancement CD guarantee
pledge for banks working with micro business borrowers in Nebraska.
| Nebraska Enterprise Fund: Summary of Program Loans + CD Guarantee for Banks |
| NEF
Business Loan |
Loan
Limits
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Terms
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Notes:
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1. Participation Loans
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$5,000 - $50,000
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Term same as matching loan - generally not more than 6 years, although
may be amortized for a longer period during those 6 years if collateral warrants.
Collateral is shared.
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NEF will purchase up to 50% of a qualifying loan from a participating program partner.
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2. NEF Micro Level 1
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$5,000 - $35,000
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No more than 5 years
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Loan referral from programs, focused on areas where there may be current gaps in micro lending in Nebraska.
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3. NEF Level 2
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Above $35,000 to $115,000 (maximum package $150,000)
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May go up to 15 years, based on security /collateral and loan purpose.
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Referral from programs, collaboration loan with program when higher loan capital is needed. May be used for real estate or building purchase uses. Generally real estate will be needed as collateral on these larger loans.
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All loan terms are subject to change. NEF reserves the right to reduce or increase maximum loan amounts, terms of renewal, interest rates and repayment structures. * Filing fees and expenses such as title insurance will be paid by the borrower.
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NEBRASKA ENTERPRISE FUND
PARTICIPATION AND COLLABORATIVE LEVEL 1 & 2 LOANS
| Project Eligibility:
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Eligible businesses are by definition “micro” business, and are a for-profit entity (sole-proprietorship, partnership, or corporation) legally doing business in Nebraska.
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| Loan Purposes:
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The purpose of NEF participation and Level 1 and 2 loans is to provide lending capital to micro businesses in Nebraska for new business start-ups, business transition or to expand or strengthen existing businesses. Eligible uses of loan funds are for the purchase or upgrade of machinery or equipment, furniture, facilities including business real estate, fixtures, supplies, or working capital.
NEF loan capital may not be used to refinance a non-performing loan held by a financial institution or for any illegal purpose. Loan applicants may be required to provide evidence that financing is unavailable from conventional sources.
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| Loan Terms:
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NEF Participation loans - preferred over NEF Micro Level 1 or NEF Level 2 collaborative loans. With NEF participation loans, NEF will purchase up to 50% of a qualifying loan from a participating program partner ($5,000 to $50,000). Participation loan terms will be the same as matching loan, generally not more than 6 years, although may be amortized for a longer period during that 6 years if collateral warrants. Annual fees, origination fees and fixed interest rate will match that of the loan originator. However interest rate and fees must meet NEF minimum requirements and maybe considered on a case by case basis. Loans will be made only to borrowers of participating NEF program partners.
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NEF Micro Level 1 Loan - Typically from $5,000 to $35,000 per loan, up to 5 year repayment, depending on loan collateral. A NEF Micro Level 1 loan may be used in communities or in cases when the micro program partner does not have the lending capacity to make the direct loan. Borrowers may not have more than one loan from NEF at a time. NEF Micro Level 1 loans may only be provided to business borrowers
based on referrals from NEF program partners. Technical assistance and /or training provided by NEF program partners in preparation of loan application, business plans, or other related loan information /documentation.
NEF Level 2 Loan - Typically more than $35,000 to $115,000 maximum loan size from NEF (package maximum may be $150,000 and may involve more than two lenders). Terms will be based on the project. Loans for buildings and land will be limited to a maximum of 15 years. Loans for equipment will generally have a term that does not exceed the useful life of the equipment. Working capital loans will not exceed 5 years.
Level 2 loans must be provided in collaboration as part of a loan package with a NEF program partner organization and other public or private capital sources if available. If the collaborative loan is for less than $35,000, then NEF matches the interest rate and term with the program partner’s loan rate and term (same as participation loan above).
NEF reserves the right to reduce or increase maximum loan amounts, terms of renewal, interest rates and repayment structures. For larger size loans, real estate and building
/ facilities will be required as collateral.
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