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IMPORTANT: As of July 1st, 2011, functions once performed by the Wisconsin Department of Commerce have been moved to other state agencies and the Wisconsin Economic Development Corporation. The former Commerce web site will continue to exist for the next several months as resources are moved to new web site locations. We will make every attempt possible to direct our users to the new locations as web resources are moved.
Forward Innovation Fund Loan Program (FIF)
The Forward Innovation Fund (FIF) loan
program is designed to provide financial assistance for the start-up
and expansion of minority- owned businesses in Wisconsin. This program
provides low interest loans to assist in the development of
minority-owned companies.
Eligible Applicants:
Eligible applicants are Minority Businesses that have a
comprehensive business plan fully describing the proposed project. The
business plan should demonstrate access to a team of professional
advisors.*
- Minority Businesses are defined as businesses 51% owned
and
controlled by any of the following: Black, Hispanic, American Indian,
Eskimo, Asian Pacific, Asian Indian, Aleut, or Native Hawaiian.
- If you do not currently have a business plan, the Early
Planning Grant (EPG) program may be able to provide you with a grant to
develop a comprehensive business plan. To access this grant, go to www.wenportal.org
- If you do not qualify for an Early Planning Grant you may
qualify for an Entrepreneurial Training Grant (ETG). The Department of
Commerce can provide applicants with a grant to help cover a portion of
the cost of attending Small Business Development Center's (SBDC) new
Entrepreneurial Training course. To access this grant, go to www.wenportal.org
Eligible Activities:
Eligible Project Costs are limited to fixed asset financing
and working capital. Examples of Eligible Project Costs include:
- Working Capital
- Acquisition of Existing Businesses
- Purchase of Equipment
- In certain cases, Land and Construction Project costs may be eligible
Note: Refinancing is
not an eligible activity.
Finance Terms And Conditions:
Interest Rate:
The Department of Commerce will provide below market interest
at a fixed rate for the life of the loan. (Typically 4%)
Terms:
- Equipment and Working Capital: 5 to 7 years
Collateral:
The Department of Commerce will seek the best collateral
position
possible to ensure that all FIF loans are adequately secured.
Repayment:
Monthly payments of the principal and interest are required.
Guarantees:
Personal guarantees are required.
Funding Availability:
A loan review process that uses the underwriting criteria
detailed
below determines the level of participation by Commerce. The goal of
Commerce is to encourage partnerships among organizations and
businesses to promote economic development in the state. Applicants
should work with a bank and a local development corporation to
structure a loan package. The FIF loan may not be the sole source of
financing, which makes this a gap financing loan program. Ideally,
applicants should have some equity in the project.
An ideal example of a $100,000 capital investment requirement
| Personal Equity |
5,000 |
| Bank |
45,000 |
| Development Corporation |
25,000 |
| MBD Loan |
25,000 |
|
Total
|
100,000
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Underwriting Criteria:
Underwriting criteria considered in the loan review process
are:
Project Viability
-
Cash Flow-adequate to support debt service
-
Creditworthiness of applicant- An application will be considered ineligible if personal credit report or Dun and Bradstreet report includes:
- Current past due loans
- Significant amount of current derogatory remarks on credit report
- Judgements or other negative
public records or outstanding legal issues
- Outstanding child support payments
- Local, State or Federal tax liens
- Open bankruptcies (bankruptcies
must have been dismissed for at least 2 years, during which time the
applicant has demonstrated significant improvements in credit history)
- Applicants will be given an
opportunity to explain poor credit history
- Work Experience-
The applicant must have at least 2 years of relevant work experince.
- Education/Training-
The applicant's education and/or training must be relevant to
the proposed business venture.
- Available Capital/Funding-
The applicant must have the cash reserves (equity)
necessary to invest in the proposed business.
-
While it is not a requirement at the time of application, our funding
commitment is contigent upon bank and/or other local funding partners
OTHER FACTORS
- Community Benefit
- Project must have a positive economic impact upon the local
community.
- Jobs
- Consideration will be given to how many jobs will be created/retained.
- Consideration will be given to how many direct jobs will be created and/or retained.
-
Competition- The proposed business must not have a negative impact upon
other local businesses.
- Area Demographics
- The proposed business be located in a target area.
The Application Process:
The FIF loan application process involves three steps:
- Interested applicants must meet the definition of a
Minority Business described above.
- The applicant will contact a Commerce Bureau of Minority
Business Representative (see below) to discuss the project and obtain
application materials.
- The applicant will submit the application to Commerce where
a
Finance Specialist will underwrite the project and make a funding
recommendation to the Minority Business Development Board. The Minority
Business Development Board will:
- Approve the FIF loan, in which case the applicant will
enter into a written loan agreement with Commerce.
OR
- Deny the proposal, in which case the applicant will receive
a letter outlining the reasons for denial.
To receive further information about the Minority Business
Development (FIF) loan program, please contact the Bureau of Minority
Business Development at:
Bureau of Minority Business Development
201 West Washington Avenue
P.O. Box 7970
Madison, WI 53707-7970
Phone: (608) 267-9550
Fax: (608) 264-6151
Email:
COMMBD@wisconson.gov
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