Great Northern Corporation Loan Program
Great Northern Corporation has established a revolving loan fund to serve businesses in all areas of Siskiyou County. Loans will be available for equipment, inventory and other short-term financing needs.
Eligibility
Eligible applicants include existing businesses as well as qualified business start-ups. Businesses may be corporations, partnerships, sole proprietorships and cooperatives that are incorporated and licensed and are located in or expanding to Siskiyou County. Projects will be commercial, industrial, or service related.
Rates and Fees
Borrowers will be required to pay for all loan associated costs. These costs include but are not restricted to – credit reports and recording fees. In addition, borrowers will pay a loan processing fee on all approved applications of 1.5% of the loan amount with a minimum of $100. Interest rates will range from 3% to 8% based on demonstrated need and ability to repay as outlined in the projections.
Terms
For the build up phase of the Loan Program, $2,500-$7,500 loans will be available with terms of up to three years. As the Loan Program matures and capital increases, larger loans with longer terms secured by real property may be possible.
Collateral Requirements
All GNC loans will be secured by collateral. No unsecured loans will be made. The types of collateral will depend on the security available, the loan amount, terms, and other conditions of the loan. The types of collateral may include liens on machinery, equipment or other fixtures, personal property such as automobiles, and other security deemed appropriate. This collateral will be secured by a UCC-1 filing. A personal guarantee will also be required.
Review Process
Once a potential project has been identified, staff will conduct a preliminary review for eligibility with Loan Fund criteria. If the project appears to meet the criteria, the applicant will be asked to submit a loan application
Staff will review this information based on the Underwriting Guidelines in the following section. If the project appears to be viable, this information will be brought to the loan committee for consideration. A project evaluation form containing information on the business, the requested use of funds and the credit qualifications of the business and owner will be considered. It will also include a recommendation on loan terms and conditions. The loan committee will either decline or approve the loan.
If declined, staff will send a letter to the client outlining the reasons for refusal. If approved, the committee can agree to or change the recommendations of staff.
If approved, staff will prepare all loan documents for closing including: loan agreement, promissory note, personal guarantee and any appropriate UCC-1 filings.
Underwriting Guidelines
The loan underwriting policies of the GNC Loan Fund are designed to promote expedited access to capital for qualified business owners. To facilitate this, we have designed a two tiered application process.
- For existing businesses, the initial application will be significantly streamlined requiring minimal information about the business. For businesses with a good track record and credit qualified owners, this may be all that is required. For businesses that meet these criteria, we may be able to approve and fund an application within one week.
- For startups or existing businesses that don’t meet the above criteria, additional information will be necessary. This will include some or all of the following:
- Personal Financial Statement
- Business/Marketing Plan
- Profit and Loss Forecast
- Business and Personal Tax returns
- Cash Flow Projections
- Resumes for Key Personnel
Each applicant’s personal credit report will be analyzed to determine good character. Each project will be examined to determine its financial viability and thus the reasonable assurance that the loan will be repaid. Depending on the project, the current and past financial statements for both the business and individuals may be analyzed along with tax returns and projections. The assumptions behind the projections will be critically analyzed. Income and expenses will be evaluated and compared historically, where applicable, and compared to industry averages. Project costs must be determined to be reasonable. Analysis of the business must also determine that past earnings and future prospects indicate an ability to meet debt obligations out of profit.
Statements and Payments
Loan statements will be mailed monthly by the 3rd of the month with payments due by the 15th.
