c22-05b.doc

Submit one (1) original of all of the following documents to:

USDA Rural Development

Attention: Business Programs

100 Federal Way

Capitol City, AA 11112

(777) 668-2070 phone; (777) 668-2056 fax

USDA Forms (These may be obtained from USDA Rural Development at the above address, or from the Internet at the indicated web sites.)

  1. Form RD 4271-1, “Application for Loan (Intermediary Relending Program).” This form can be obtained on line at:
  1. Form RD 400-4, “Assurance Agreement.” This form can be obtained on line at:
  1. Form RD 1910-11, “Application Certification Federal Collection Policies for Consumer or Commercial Debts.” This form can be obtained on line at:
  1. Form AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters -- Primary Covered Transactions”. ).” This form can be obtained on line at:

ftp://ftp.fsa.usda.gov/public/forms/ad1047.pdf

  1. Exhibit A-1 of RD Instruction 1940-Q, “Certification for Contracts, Grants and Loans”. Appended to the end of this checklist.
Proposed Work Plan
  1. Narrative Supplement to IRP Application – attached to this checklist as Exhibit A. This supplemental information is needed to prioritize and evaluate your proposal. (If desired, USDA can provide this to the applicant in an Word 97 document format.)
  1. A draft Work Plan for the proposed IRP revolving fund. Guidance and a recommended format is appended as Exhibit B.

Financial Information

  1. Accountant-prepared, year-end audited financial statements for the preceding 3 fiscal years (or, if a new organization, for as long as the organization has been in existence).
  1. Pro forma balance sheet at IRP loan closing -- derived from latest audited balance sheet (above) showing the effect of the proposed IRP loan at loan closing.

Financial Information (continued)

  1. Projected financial statements for the next 4 years, as follows. (Note: When completing these projections, assume that the IRP loan which will be structured with annual interest-only payments in Years 1-3, and an annual amortized installment in Year 4 – amortized at 1% over 27 years.)
  1. For the applicant’s organization on a consolidated basis (including proposed IRP fund) for four years. The projections must include:
  • Income and cash flow statements -- indicating repayment ability for IRP loan
  • Balance sheets
  • Narrative explanation of the assumptions used in the forecasts and an explanation of sources of administrative & operating funds
  1. For the proposed IRP revolving fund’s operation for four years. (This may be included a supporting schedule to the consolidated projection.) The financials must include:
  • Income and cash flow statements -- indicating repayment ability for IRP loan
  • Balance sheets
  • Narrative explanation of the assumptions used in the forecasts and an explanation of sources of administrative & operating funds

Applicant Background, Experience, and Legal Capacity

  1. Historical Relending Performance. A table setting forth your organization’s experience operating revolving loan funds over the past three years, detailing loan making activity, leveraging, loans to under-represented groups, portfolio size, delinquency, and loan losses. (If desired, USDA can provide this to the applicant in an Excel 97 spreadsheet format.)
  1. Annual reports of organization for last three years (If not available, a narrative may be provided outlining the organization’s experience, activities, initiatives, and accomplishments during the last three years in lending, economic development, and other fields. The narrative should indicate all sources of public & philanthropic funding obtained in past three years.)
  1. List – with resumes – of all personnel who would be responsible for the IRP revolving fund
  1. List of members on applicant’s Board of Directors with a brief description of background and experience of each
  1. Organizational documents – articles of incorporation, by-laws, certificate of good standing, resolution to apply for this loan
  1. Evidence of authority to conduct relending activities – e.g., opinion letter from applicant’s legal counsel.

Exhibit A. Narrative Supplement to IRP Application

The following information supplements Form RD 4274-1, “Application for Loan.”

I. Community’s Need and Support for Proposed IRP Revolving Fund:

A. Briefly describe any natural disasters that have affected the proposed IRP service area in the last three years.

B. Briefly describe any economic set-backs (emphasizing specific economic dislocations, loss of major industries, and plant closing) that have affected the proposed IRP service area in the last three years.

C. Is a new revolving loan fund specifically mentioned in any local, county, or regional strategic plan or economic development plan? _____ If yes, identify the plan(s) below and attach a copy of the relevant sections.

D. Evidence of financial commitments to the project from non-USDA sources, attach letters, etc. to document this

E. Other evidence of support that you would like USDA to be aware of, attach letters, etc.

II. Collateral for the Proposed IRP Loan:

The collateral of all IRP loans will be the IRP revolving fund, i.e., the IRP loan proceeds and any additional contributions by the IRP borrower (see C.2 above) -- including all assets deriving therefrom. Is additional collateral, real estate, etc., proposed? ______

B. If “yes,” provide property description, estimated value, and basis for valuation:

Attach more detailed description of proposed collateral if available.

III. Technical Assistance Planned in Conjunction with Operation of Proposed IRP Revolving Fund:

A. Describe planned technical assistance to ultimate recipients of IRP revolving fund loans.

B. Identify the parties that will provide the proposed technical assistance and their qualifications.

C. Sources of funds for technical assistance programs

IV. Known Demand for Proposed IRP Revolving Fund:

A. Identification of any proposed & known ultimate recipients (to the extent this information is available):

Borrower name

/

Business type

/

Loan amount

/

Use of loan funds

B. Expected time needed to relend all of requested IRP funds: ___ months (should not exceed 1year)

C. Basis for concluding requested funds can be re-loaned in this time-frame and in any event not in excess of 3 years from the date of IRP loan closing:

V. Expected Financing to Arise from the Proposed IRP Loan:

Financing Source

/ Amount of Financing Expected
A / Proposed IRP loan / $
B / Proposed applicant contribution to be irrevocably deposited in IRP revolving fund ¹ / +$
C / Size of IRP revolving fund / = $
D / Amount that applicant will loan from sources other than the IRP revolving fund to participate with its IRP revolving fund loans ² / $
E / Amount of expected leveraging from outside sources (besides the borrowers themselves) – e.g. banks.³ / +$
F / Total financing arising from proposed IRP loan / = $

1.a. The funds indicated on line B above must remain in the IRP revolving fund and serve as security for the IRP loan. The deposit of these non-USDA funds into the IRP revolving loan fund will be accomplished under the following schedule:

1.b. In any event, these funds will be deposited into the IRP revolving fund not later than ______months after the proposed IRP loan is closed.

2. Explain the basis for the figure indicated on line D above.

3. Explain the basis for the figure indicated on line E above (e.g., based on historical RLF leveraging data, attached commitment letters from banks, etc.)

______

Applicant signatureTitleDate

Attachments (as applicable):

Any relevant sections of local, county, or regional strategic plans or economic development plans (see I.C above)

Detailed description of proposed additional collateral (see II.B above)

Letters of support and evidence of financial commitments to the IRP revolving fund (see I.D, I.E, and III.C above)

Exhibit B. Suggested Format for IRP Revolving Fund Work Plan

The Work Plan establishes the general criteria for operation of the IRP revolving fund. It governs the operation of the fund -- both for the USDA IRP loan that are initially drawn as well as for all subsequent, revolved funds -- until the IRP loan is paid in full. Once approved, it can only be modified with the prior written concurrence of USDA Rural Development.

The Work Plan should, as a minimum, include all of the following sections. (USDA rules relating to the specific topics are listed in italics for reference purposes only.)

I. Goals and objectives

  1. Compliance with USDA regulations – The fund must comply with RD Instruction 4274-D.
  2. Service area
  3. Goals & outcomes sought -- e.g., # jobs created, etc.
  4. Priorities and targeting criteria

a)Percent of loans targeted to under-represented groups – see §4274.334(c)(2)(iv)

b)Whether borrowers will be required as a condition of credit to employ some percentage of their workforce from members of families with income below the poverty line? If yes, what percentage? – see §4274.334(c)(2)(v)

II. Credit criteria

1.Borrower eligibility criteria – see §4274.308

2.Authorized loan purposes – see §4274.314(b) & §4274.319

3.Required participation by others – see §4274.331(b)(2)

4.Loan size – see §4274.331(b)&(c)

5.Fees & charges

6.Rates – see §4274.325(b)

7.Terms – see §4274.320(b)

III. Underwriting criteria

  1. Equity requirements
  2. Collateral requirements & normal lien priority – see §4274.326(b)
  3. Insurance requirements – see §4274.338(a)(7)(i-iv)

IV. Operation of the IRP revolving fund – loan making

  1. Application process
  2. Approval process
  3. Fund disbursement to borrowers

V. Operation of the IRP revolving fund -- loan servicing

  1. Monitoring of borrowers
  2. Reporting requirements of borrowers
  3. Managing revolving lines of credit (if applicable) – see §4274.314(b)(14)(iv)
  4. Maintenance of a separate ledger and segregated account – see §4274.338(b)(3)

RD Instruction 1940-Q

Exhibit A-1

CERTIFICATION FOR CONTRACTS, GRANTS AND LOANS

The undersigned certifies, to the best of his or her knowledge and belief, that:

1. No Federal appropriated funds have been paid or will be paid, by or on behalf of the undersigned, to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with the awarding of any Federal contract, the making of any Federal grant or Federal loan, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant or loan.

2. If any funds other than Federal appropriated funds have been paid or will be paid to any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with this Federal contract, grant or loan, the undersigned shall complete and submit Standard Form - LLL, "Disclosure of Lobbying Activities," in accordance with its instructions.

3. The undersigned shall require that the language of this certification be included in the award documents for all subawards at all tiers (including contracts, subcontracts, and subgrants under grants and loans) and that all subrecipients shall certify and disclose accordingly.

This certification is a material representation of fact upon which reliance was placed when this transaction was made or entered into. Submission of this certification is a prerequisite for making or entering into this transaction imposed by section 1352, title 31, U.S. Code. Any person who fails to file the required certification shall be subject to a civil penalty of not less than $10,000 and not more than $100,000 for each such failure.

______

(name) (date)

______

(title)

08-21-91) PN 171