Regional Economic

Development Group

Since 1978

THREE LOAN PROGRAMS

Revolving Loan Fund Program (RLF)

SBA 504 Loan Fund Program (SBA 504)

Intermediary Relending Program (IRP)

PROGRAM SUMMARIES

Program # of Loans Amount

RLF 310 $ 16,293,198

SBA 504 197 $ 56,448,000

IRP 9 $ _ 425,000

TOTAL 516 $ 73,166,198As of June 30, 2006

Active 188 $ 29,594,823As of March 31, 2007

Loan Security Documentation

and

Collection

THE 5 C’s OF CREDIT

Character

Cash Flow

Collateral

Capitalization

Conditions

COLLATERAL

Security given as a pledge for the fulfillment of an obligation.

Adequate to provide reasonable assurance of repayment in the event cash flow does not permit.

Must be perfected to be effective

TYPES OF COLLATERAL

Real Estate

Personal (Chattel)Property

Other (ie. Guarantee)

REAL ESTATE

Mortgage

Spousal Rights

Homestead Exemption

3 day right of recession

Abstract Update or Basket Lien Search

PERSONAL PROPERTY

Security Agreement underlying written pledge or promise for fulfillment or repayment of a loan

UCC Financing Statement serves as public record of the pledge or promise and MUST match security agreement. Abstract or basket lien search UCC lien search

WHERE TO FILE

State where corporation is incorporated Filing

Online ( www.sos.state.ia.us ) Mail Develop standard, then cut & paste – check & recheck

Lien and Tax Search

County where collateral is located

Lien Search

GUARANTEES

Unsecured

Secured

Spousal guaranty

COLLECTIONS

Late Letter (10 days) Warning Letter Notice of Acceleration (Demand Letter) Legal Action

Notice should include:

Specific amount due or in default

Cure Period

Include Notice to Guarantor

Smaller amounts are typically better worked out, larger amounts less probable (deeper hole)

LOAN AGREEMENT PROVISIONS Authorize lender to file and maintain all

necessary financing statements Deficiency of Conditions of Lending Section Late payment and NSF Check fee.

(ie. Minimum $25) Promissory Note, Loan agreement, Security

Agreement and Financing Statements should parallel each other

INNOVATIVE STRATEGIESHIDDEN SECURITY OPPORTUNITIES Vehicles titled and not included under UCC

Home equity or other real estate held

Purchase money security interest in certain assets Disburse funds for project (equipment) Financing statement should include, at a minimum,

make, model & serial number Debtor must take possession within 20 days

Life insurance assignment - death benefit and cash surrender value

Intercreditor agreement

Subordination agreement

INNOVATIVE STRATEGIESHIDDEN SECURITY OPPORTUNITIES

BROCHURES AVAILABLE

Black Hawk Economic Development, Inc.

The Organization

Revolving Loan Fund (RLF) Program

SBA 504 Loan Program

IRP Loan Program

Credit and Finance Factors