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The
Loan Process Loan Inquiries and Preliminary Screening The loan process begins when a potential loan customer expresses interest in obtaining financing for a proposed business venture or business expansion. The first step is to obtain a Region 10 application, which is available in person, by phone, by e-mail, via this web site, or by writing to Region 10 Revolving Loan Fund, 300 N. Cascade, Suite 1, P.O. Box 849, Montrose, CO, 81402. The Region 10 staff will then consult with potential loan clients to determine their eligibility and to assess whether or not they should continue with the loan process. The loan applicant/borrower may be a corporation, partnership, Limited Liability Company, or sole proprietorship. The funds loaned may be used for operating capital, machinery and equipment, inventory, or furniture and fixtures. All Region 10 loans must be personally guaranteed by the borrower and collateralized with business or personal assets. In addition, projected business cash flows must be sufficient to service the additional debt created by the new Region 10 loan. All Region 10 loans are fixed rate, fixed term loans with a maturity date no longer than 7 to 10 years. The Loan Application and Application Fee An applicant must submit a completed application form accompanied by a current business plan, resumes of principal(s), historical and/or pro forma financials, two years prior tax returns, personal financial statements, and any other terms, conditions, and assurances that may be required. Analysis of the application will not begin until the application is complete and the applicant has paid the application fee ($50 non-refundable). Loan applications can be sent to P.O. Box 849, Montrose, Colorado 81402 or can be delivered to 300 North Cascade, Suite 1, Montrose, Colorado. Applicants needing assistance with the development of a business plan should contact the Small Business Development Center at (970) 874-8772. Application Review & Analysis Upon receipt of a completed loan application, the RLF loan officer may schedule an appointment with the principal(s) to review the documents, visit their business facility, and inspect any collateral offered. If the project is financially complex, it may be appropriate to consult with another lender/financial representative as well as with financial advisors of the project. Loan Approval Once all the information is available, the applications are submitted to the loan committee, which makes all the decisions regarding approval of the loan. This process usually takes between 30 and 45 days. Loans which have specific job creation/retention requirements may take up to 120 days to fully process. Closing If the loan is approved, a commitment letter is sent to the applicant for acceptance. No expenditures or commitments for expenditures that bind Region 10 may be made prior to loan closing without prior written approval. The loan closing will be scheduled at a convenient time for the borrower and Region 10. Closing costs and associated fees are due at closing and must be paid in full before disbursement of funds. A settlement sheet is provided at closing. Loan Monitoring and Reporting It is the responsibility of the borrower to make payments, submit periodic reports, and remain in contact with Region 10. Annual financial statements are also required at the end of each year to update Region 10 on the current financial status of the customers in the loan portfolio. Region 10 monitors all loans and reserves the right to take action on delinquent loan accounts. Other Financing Options The Colorado Office of Economic Development (OED) makes direct loans to businesses in rural regions of Colorado for purposes which include inventory, working capital, machinery, equipment, and construction. There are also incentive funds available through the Economic Development Commission to support expanding businesses and relocations. One of OED’s primary criteria is the creation of jobs for low to moderate income persons. For more information, contact the Colorado Office of Economic Development at (303) 892-3840, or visit their Web site at www.state.co.us/oed. The Colorado Housing and Finance Authority (CHFA) also provides a variety of business financing programs, primarily for small to mid-sized firms. CHFA’s Direct Lending Programs are designed to assist businesses in the acquisition of major fixed assets such as real estate and equipment. The programs provide fixed rates with terms up to 20 years, and businesses located in rural areas of the state may be eligible for reduced interest rates. For more information, contact a CHFA representative at (303) 297-7329, or log on to the CHFA web site at www.colohfa.org. An additional source of business financing comes from Certified Capital Companies, known as CAPCOs. Certified Capital Companies are financed by insurance companies that receive special tax credits for investing in Colorado businesses. The CAPCOs then invest directly in businesses with the approval of the state Office of Economic Development. For more information regarding Colorado CAPCOs, visit the Colorado Office of Economic Development web site at www.state.co.us/oed. |
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Inc. 300 North Cascade, Suite #1, Montrose, Colorado 81401 Ph: (970) 249-2436 Fax: (970) 249-2488 E-mail: info@region10.net |
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