Lincoln, Neb., August 24, 2010 – USDA Rural Development is accepting applications for the Section 9007 Rural Energy for America Program (REAP) Feasibility Study Grant program.

The REAP/Feasibility Study Grant Program provides grants to agricultural producers and rural small businesses to conduct a feasibility study for a renewable energy system.

The grants are awarded on a competitive basis for up to 25 percent of total eligible project costs or $50,000 whichever is less.

Eligible feasibility studies for renewable energy systems include projects that will produce energy from wind, solar, biomass, geothermal, hydro power and hydrogen-based sources. The energy to be produced includes, heat, electricity, or fuel.

For all projects, the system must be located in a rural area and must be owned by the applicant.

 Applications must be received in your local USDA Rural Development office no later than 4:30 p.m. CT on October 5, 2010.   You can locate the Rural Development office nearest you by visiting: http://www.rurdev.usda.gov/ne/Contact_Us.htm.  Application materials can be located online at:  http://www.rurdev.usda.gov/ne/Energy_Section%209007%20Renewable%20Energy%20Feasibility%20Study%20Funding.htm.   Applications can also be downloaded and submitted through http://www.grants.gov.  The Notice of Funding Availability for Renewable Energy Feasibility Studies Grants under the REAP can be found in the August 6, 2010 Federal Register Vol. 75 No. 151 page 47525. Contact Deb Yocum, rural energy coordinator at 402-437-5554 or debra.yocum@ne.usda.gov. 

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To access the webinar, click on the provided link:   https://canhelp.webex.com/canhelp/lsr.php?AT=pb&SP=MC&rID=58206977&rKey=3fe5e5feb3f41ade

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Launched in 2009, Investor Search allows users to search by location, investment size, industry, milestone, valuation, and more. You can also search by keyword, and sort results based on closest location, most active, response time, investments, and applications. The tool includes profiles of over 1,000 venture capital firms and angel investor groups.

Angelsoft.net has an online business planning tool that helps the business owner put together a business plan specifically designed for the investors. You will be asked 11 questions that every investor wants answered. Along the way the website  provides you with tips on how to best complete each question. When you are finished, you will have a document that you print, share as a PDF, or use to apply to the 1,026 groups that accept the Angelsoft application.

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• 7(a) loans are the most basic and most used type loan of SBA’s business loan programs and are only available on a guaranty basis. The loans are provided by lenders who choose to structure their own loans by SBA’s requirements and who apply and receive a guaranty from SBA on a portion of this loan. The SBA does not fully guaranty 7(a) loans.

Besides credit and eligibility criteria, there are general terms and conditions SBA requires of a business seeking financial assistance.  This information is available on the SBA Basic 7(a) Loan Program page.

• The SBA Microloan Program provides very small loans to start-up, newly established, or growing small business concerns.  SBA makes funds available to nonprofit community based lenders (intermediaries) which, in turn, make loans to eligible borrowers in amounts up to a maximum of $35,000.  Applications are submitted to the local intermediary and all credit decisions are made on the local level.  Interest rates will vary, depending upon the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally these rates will be between 8 eight percent and thirteen percent.

A contact list of eligible Microloan lenders is available on the SBA Microloan page.

• SBA America’s Recovery Capital Loan Program can provide up to $35,000 in short-term relief for viable small businesses facing immediate financial hardship due to uncertain economic conditions. Each small business is limited to one ARC loan. ARC loans will be offered by some SBA lenders as long as funding is available or until September 30, 2010, whichever comes first. The temporary ARC program offers interest-free loans to viable small businesses, which carry a 100 percent guaranty from the SBA to the lender and require no fees paid to SBA. Loan proceeds are provided over a six-month period and repayment of the ARC loan principal is deferred for 12 months after the last disbursement of the proceeds. Repayment can extend up to five years.

For ARC loan details contact the Nebraska Small Business Association or SBA ARC loan website.

• The CDC/504 loan program is a long-term financing tool for economic development within a community. The 504 Program provides growing businesses with long-term, fixed-rate financing for major fixed assets, such as land and buildings. A Certified Development Company is a nonprofit corporation set up to contribute to the economic development of its community. CDCs work with the SBA and private-sector lenders to provide financing to small businesses.  The maximum SBA debenture is $1,500,000 when meeting the job creation criteria or a community development goal. Generally, a business must create or retain one job for every $50,000 provided by the SBA except for “Small Manufacturers” which have a $100,000 job creation or retention goal (see below).The maximum SBA debenture is $2.0 million when meeting a public policy goal.

Current SBA 504 lender in Nebraska is the Nebraska Economic Development Corporation (NEDCO)

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November-Deadline-for-Value-Added-Program

Contact: the article’s author, Traci Bruckner, Assistant Policy Program Director for the Center for Rural Affairs at 402.687.2103 x 1016 or tracib@cfra.org. You can also check out a fact sheet on the program at http://www.cfra.org/resources/vapg/fact_sheet.  This article is from the Center for Rural Affairs’ October 2009 monthly newsletter.

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Banks are cutting back, but capital is still available for worthy companies that know where to look.”We have one of those mortgages that’s all over the news right now,” says Dave Tiller.That mortgage is an option adjustable rate mortgage, which allows borrowers to pay less than the interest that’s accumulating on the loan — so the amount of the loan grows over time. Back in 2005, when Tiller refinanced his house, such loans were the latest thing. Tiller figured that paying $1,100 a month on the mortgage and deferring $1,400 a month in interest would maximize the amount of cash he had to invest in Studeo Legal, the Peoria, Arizona, legal-document management and consulting firm he was launching.

Then came the credit crunch. His five-bedroom home, appraised at $390,000 when he refinanced, is now worth just $320,000 — $10,000 less than he owes. Meanwhile, his monthly payment has ballooned to $3,000, which is $1,000 more than it would have been if he had been paying interest all along. That means he has less to invest in his business, and, thanks to the credit crunch, virtually no other options for finding capital.

Funding has never been easy to come by for small-business owners. But the current crunch represents a rare confluence of factors that is making things especially painful. Mortgage lending has tightened, and that’s been rippling through all sources of credit. Banks and even angel investors are raising lending and investment standards. According to a survey recently released by the Federal Reserve Board, about 65 percent of banks reported tightening their lending to small businesses in July — compared with 50 percent in April. A survey released in July by Deloitte Financial Services found that 76 percent of those who applied for small-business financing found it harder to land loans than a year earlier.

Funding remains available, but entrepreneurs will have to be persistent. The search for capital will probably take a lot longer than it did a few years ago, and the pot of gold at the end of the rainbow will not be quite so big. The pain is particularly acute for entrepreneurs who have a lot of personal debt. Because the credit identity of small-business owners often is the credit identity of their companies, personal financial stresses can hit their businesses hard — and vice versa. A bad personal credit score will make it harder to find a business loan, particularly in today’s risk-averse environment.

Borrowers need to explore all their options with their bankers, says Will Howle, chief operating officer for Wachovia’s retail and small-business bank. If your home is shrinking in value, don’t use it as collateral. Instead, try to get a business line of credit based on the assets or profitability of your company. If you have just landed a major contract, tell your banker about it, and explain what profits you are expecting from the deal and why. And tell him or her about any other financing you have found. Even if it’s just a small angel investment, that might help the bank make a decision in your favor, because it improves your debt-to-equity ratio. “Business owners should be proactive rather than reactive when it comes to the financing of their business,” Howle says.

You could also look beyond your bank for funds. State and municipal economic development programs sometimes have cash for growing companies. Brady Davis, CEO of Elements Health Plans, a health care consulting firm based in Portland, Oregon, used personal funds to launch his company, and last year he went looking for outside financing for the first time. Initially, several angels showed interest — but they quickly retreated when the economy turned south. “Investors are looking at risk very differently now,” Davis says.

So Davis went on the hunt. In April, he secured a $200,000 line of credit with a bank. But that wasn’t enough to pay for his plans to add staff and ramp up marketing. So he decided to pursue a $150,000 loan offered through the Portland Development Commission, an arm of the city of Portland. The first two years of the loan are interest free, and if he meets hiring and wage goals, the rate after that will be only 1 percent. “It’s free money,” says Davis. Well, maybe — the deal hasn’t closed yet. Meanwhile, Elements Health Plans’ revenue has doubled this year, to more than $2 million. That helped Davis finally attract an angel investor this summer who was drawn by Elements’ growth prospects and reassured by the fact that it was able to snare bank financing in a rough credit climate. “He’s glad he’s not the only one taking a risk,” Davis says.

Good companies are definitely making it through the tough times. But more credit surprises are in store. Entrepreneurs will need to stay nimble to keep debt ratios in line with steadily tightening loan standards. The line of credit you have today may not be there tomorrow.

Michael Diglio’s nearly evaporated. Diglio is president of American Facility Services, an Orlando facility maintenance firm with 50 employees. A couple of years ago, he got a line of credit through a national bank, using his house, which had been appraised at $650,000, as collateral. He tapped the line only three times and repaid within a month each time. But that didn’t stop the bank from shrinking the line in May, from $200,000 to $65,000, citing contracting home values in Florida. “I called my local banker, and they said they had no control over it,” says Diglio. Earlier this year, a local real estate agent pegged the value of Diglio’s house at about $595,000. “I understand that there’s a correction in the housing market — but not enough to reduce my line of credit to $65,000,” he says.

So he fought back. Diglio appealed to the bank by sending refuting documentation, including an assessment of home values in his neighborhood from the online real estate service Zillow.com and a letter from that same bank congratulating him on his excellent personal credit score. This summer, he checked again, and his line of credit had been restored.

But other entrepreneurs, including Studeo Legal’s Tiller, have not done so well. In late 2006, he signed a million- dollar contract, which allowed him to wipe out some $50,000 in credit card debt. But he has another $40,000 to go. And he is still struggling with his mortgage. Local bankers recently told Tiller that his best hope for refinancing was probably a Federal Housing Administration loan, given that the agency is reaching out to homeowners affected by the sub-prime crisis. Tiller is keeping track of all his debt on a spreadsheet labeled “Misery,” and once he’s done paying it off, he plans to print the document and burn it. But even with hindsight, he thinks he made the right decisions. “In retrospect,” Tiller says, “there’s no other way I could have pulled this off.”

Borrowers need to explore all their options with their bankers, says Will Howle, chief operating officer for Wachovia’s retail and small-business bank. If your home is shrinking in value, don’t use it as collateral. Instead, try to get a business line of credit based on the assets or profitability of your company. If you have just landed a major contract, tell your banker about it, and explain what profits you are expecting from the deal and why. And tell him or her about any other financing you have found. Even if it’s just a small angel investment, that might help the bank make a decision in your favor, because it improves your debt-to-equity ratio. “Business owners should be proactive rather than reactive when it comes to the financing of their business,” Howle says.

For the remainder of this article simply click on the author’s name.

By Joanne Cleaver |  Oct 1, 2008 Inc. Magazine

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Prior to seeking a SBA loan, review the SBA eligibility requirements to make sure you qualify.  Every application needs positive credit merits to be approved. These are the same credit factors a lender will review and analyze before deciding whether to internally approve your loan application, seek a guaranty from SBA to support their loan to you, or decline your application all together.

There is a very informative online training on SBA lending programs.   It would be very helpful to individuals considering SBA loans.  Finance Primer: Guide to SBA’s Loan Guaranty Programs.

SBA also has a free online course on How to prepare a Loan Package.

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