Illinois Administrative Code › Title 14 - COMMERCE › Part 540 - TECHNOLOGY COMMERCIALIZATION GRANT-IN-AID PROGRAMS › Subpart B - ENTREPRENEURIAL INVESTMENT INITIATIVE PROGRAM › Section 540.140 - Program Application Contents

Current through Register Vol. 48, No. 28, July 12, 2024
Applications must address the following items:
a) Needs Within the Local Capital Market -
				Provide information on the local financial markets, including banking
				philosophy in the area, constraints imposed on development by local lending
				policies of financial institutions and the availability of private capital to
				invest. Describe how the local revolving loan fund project shall be designed to
				directly address those constraints that have been identified. Show the extent
				to which the local demand for public loans justifies the size of the grant
				being requested.
AGENCY NOTE: The Department will be looking for examples of
				  absence of lending in certain geographical areas, relatively high or floating
				  interest rates for all or certain types of loans because the bank's costs of
				  funds is high or variable, unavailability of loans that are a longer term
				  (greater than five years) because the bank's deposits are also short term, and
				  unavailability of lending capital or limits on the size of available capital. A
				  deposit to investment ratio of less than 20% would indicate a conservative
				  posture of local banks. A weak entrepreneurial environment or low number of new
				  business start ups in an area would indicate problems or weaknesses in the
				  ability of conventional lenders to serve borrowers and business financing
				  needs.
b) Business and Job
				Development Strategy - Identify the types of eligible borrowers which are to be
				served and the geographic area to be served such as: supporting entrepreneurial
				and self-employment opportunities; serving local area low-income and unemployed
				residents; serving individuals within a county, multi-county area, statewide,
				etc.; or assisting those who are unable to secure credit from conventional
				sources. Also list the job development goals of the RLF project, for example,
				the expected ratio of new full-time or part-time businesses or jobs created by
				a borrower to the amount of RLF proceeds provided.
c) Staffing and Management Activities -
				Describe the procedures and demonstrate the capacity to manage and operate the
				RLF locally. Describe how the project shall carry out loan packaging and
				processing, servicing, tracking repayments, and collection processes. Provide
				proof of authority to operate a revolving loan fund, including, as appropriate,
				articles of incorporation, by-laws, and a resolution of the board of directors
				of the organization authorizing participation.
d) Individual Loan Standards - Describe the
				parameters under which RLF loan financing shall be provided to a borrower.
				Identify the types of loans anticipated (for example deferred loans, debt with
				equity features or others), the interest rates to be charged, allowable uses of
				funds, and length of loans expected.
e) Budget and RLF Capital Management Strategy
				- Identify the amount and from what source(s) the Project Operator shall
				provide a match for the Department's grant, at least equal to one-half the
				amount of the grant from the Department, which shall serve as the source(s) of
				capital to start the RLF. Describe how these other financing sources shall be
				induced to participate.
f)
				Financial Evaluation - Describe procedures to assure that eligible borrowers
				which shall be financed from the local RLF shall undergo an evaluation and
				state the qualifications, experience, and responsibility of the parties
				involved in this process.
g) Loan
				Agreement - Describe elements of the loan agreement, loan security and
				collateral, and insurance requirements, so as to assure adequate protection of
				the use of funds. Describe the role the Project Operator shall play in
				establishing terms for the loans and in monitoring the progress of the loan.
				Describe procedures for handling defaulted loans.
h) Marketing Activities - Show how the RLF
				project shall be adequately marketed to eligible start-up businesses. Detail
				clearly the outreach activities, types of local application materials, direct
				advertising, community discussions, or linkages with potential referral
				sources.
i) Business Assistance
				Strategy - Describe mechanisms to be used to assure that borrowers (start-up
				business owners receiving financial assistance) have received business training
				and education, or have completed a Self-Employment Training Course, have a
				business and finance plan, and have experience in the proposed business area.
				In addition, identify support service mechanisms to provide ongoing management
				support, technical assistance, and guidance to the start-up business.