The Nebraska Enterprise Fund is an intermediary to microenterprise development organizations and community revolving loan funds, providing Evergreen loans to assist organizations with match as capital is raised from other sources. Partnering and assisting programs across Nebraska to help broaden the availability of financing and business development assistance is crucial to a successful, comprehensive, community development strategy in communities across the state.
NEF provides direct links to program partners through the Business Resource Directory and the Program Partners/MIRS list. NEF encourages businesses to take the time to contact and support organizations that serve their area. It is important that potential and existing businesses utilize any possible resource that may help them along the start-up and growth spectrum. NEF recognizes other Nebraska resource providers in “Other Business Resource Links”.
Nebraska Enterprise Fund’s operating model is two pronged as seen in flow chart below. NEF offers direct small/micro business financing assistance and assists microenterprise development organizations across the state with capital and capacity building assistance.
Summary of Program Loans
|Type of Loan||Maximum Loan Amount||Maximum Term||Interest Rate||Notes:|
|1. Evergreen Loans||$100,000 (borrowers may have more than one loan)||5 years; renewable based on good performance; no limit on renewals||2% above cost of available funds*||Interest-only payments (monthly by ACH)
NEF may negotiate payment terms.
|2. Loan Loss Reserve
|Varies by program requirement||Varies by program requirement||NEF receives deposit interest||For programs using non-NEF loan capital sources.|
* check with NEF on current rate
** Loan Loss Reserve for lending organizations is used only when funding for such program is available.
EVERGREEN LOAN for Program Borrowers
Evergreen Loan Application
The Nebraska Enterprise Fund’s Evergreen loan program serves -
- Any local non-profit or public sector organization that provides microenterprise loans to small businesses in Nebraska.
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).
- 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;
- Refinancing a non-performing loan held by a financial institution;
- Using for any illegal purpose;
- Paying the operating expenses of micro lending organizations; however, interest income earned from relending principal to micro businesses may be used for operating expenses.
EVERGREEN & LOAN LOSS RESERVE LOANS TO PROGRAMS
|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 $50,000) to “micro businesses” (ten 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). $50,000 loan limit still applies, however with multiple lenders, total package may be up to $150,000. 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 and loan size has varied from this maximum, depending on program experience and current need). 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 and are available only on a limited basis.|
|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.|
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.