ARC Business Development RLF Grants Guidelines:
Reporting Loans Dispursed/Requesting a Release of Grant Funds
The RLF Form must be used to report to the Appalachian Regional Commission (ARC) each loan closed.
All grant payments (drawdowns) are made on the basis of a grantee invoice. Grantees submit invoices in the form of a letter requesting a payment to fund a loan. Each invoice must be accompanied by a report of the Grantee's intent to close an ARC funded loan using The RLF Form and required attachments (see paragraph VI.C.1., these guidelines).
- Reports may be made at any time after a loan commitment has been made.
- Reports must be made to support requests for RLF grant payments.
- Reports must be made with a Grantee's semiannual financial reports to support any loan shown as closed for the first time on the List of Loans Outstanding (Schedule B-2) if the RLF Form had not previously been submitted to ARC.
Preparing the RLF Form
The following guidance is for preparing The RLF Form.
- Borrower's Name: Enter the name of the actual (entity legally responsible to repay) borrower, whether it is corporate, partnership or an individual.
- Borrower Business Mailing Address: Enter the address at which the borrower receives mail, including zip code, as opposed to the street location although they could be the same.
- Location of Business: This entry should be the street address, city, highway intersection location and county.
- Type of Business: Enter the narrative title of the Standard Industrial Classification (SIC) for the type of activity borrowing funds.
- Describe the Project for which the Loan is to be used: Enter at least a three sentence description of the borrower's project.
- Funds will be used for: In this section, project funds are earmarked for various authorized purposes that make up the project (see paragraph IV.B., these guidelines).
- Project funds for use as Working Capital includes uses for inventory, cash flow requirements, small items of office equipment not normally capitalized, separate loans for interest obligation on interim construction loans, separate loans for reasonable fees of loan packaging, environmental data collection, consultants and fees of licensed professionals.
- An "Other" section is provided for any eligible purpose not included in the specific purposes shown on The RLF Form. Enter the specific purpose. Loans to refinance existing debt will be in this section (see sub-paragraph IV.B.1.e., these guidelines).
- Number of Jobs Created and/or Saved: Enter the jobs created (C) and/or saved (S), in the space provided. The jobs entered are those on which the loan is based, as reflected in the Loan Use Agreement or comparable document. Private developers must possess binding commitments from for profit businesses to occupy buildings. The company name and jobs to be created or saved by each business tenant should be shown.
- Number of Months, from loan closing, in which jobs will be created: Enter the number of months the borrower has to create jobs. This is negotiated with the borrower (normally from 12 to 48 months) and reflected in the Loan Use Agreement or comparable document. Jobs saved are considered to be over the term of the loan. Enter the number of months in which a private developer's tenant business will have to create or save jobs.
- Terms of the ARC Loan: Space is provided to record conditions placed on a borrower's use of loan funds. Interest rate, length of loan and terms must be consistent with these guidelines and the Grantee's RLF Operating Plan.
- Source of Funds: Identify funding sources participating in the project. The specific detail shown on The RLF Form illustrates the detail to be reported. Not all projects will have the large number of funding participants identified. Each lender must be shown. The Additional Sources section is provided for specifically identifying sources of project funds other than those specified. Identify the specific loan program.
- Type of Collateral/Security provided:
- Enter the mortgage position and identify the property secured. Repeat for each piece of property secured.
- A chattel mortgage/lien applies to movable property. Enter the secured position and identify the equipment, machinery or other property pledged. Repeat for each class of property secured.
- Personal guarantees apply to the borrower and spouse to the extent that the law will allow (see paragraph V.B.5., these guidelines).
- Name the Borrower's key personnel on which life insurance is required (see paragraph V.B.4., these guidelines).
- The "Other" section is provided for additional collateral and/or security items, such as hazard and/or flood insurance, subordination agreements, intercreditor agreements etc.
- This Loan satisfies the (name grantee) ____________________________RLF Operating Plan: This section is to be used to confirm that the project that is the subject of this form conforms with the borrower's RLF Operating Plan, its goals and objectives and targeting requirements. Use the space provided to explain exceptions that the Grantee is empowered to make from their RLF Operating Plan.
- Documents that are or will be obtained from the borrower are/will be in file: This statement gives emphasis to the fact that ARC expects each grantee to maintain loan files on each loan. As a minimum the documents identified in this section must be in that file.
- The "Other relevant information..." section is to be used for identifying documents such as subordination agreements, intercreditor agreements etc. that will be in file.
- The "Collateral/Security documents" section. Use the "Other" line for flood insurance evidence if appropriate.
- The "credit report or credit verification" section may include as an alternative to the standard Dun and Bradstreet credit report a written statement from a grantee attesting to the credit worthiness of the borrower as discovered by the grantee.
- The "Written evidence that commercial lending for the borrower was not otherwise available..." normally consists of a commercial lending institution commitment letter. Grantees may document this requirement by other means subject to ARC review (see paragraph IV.A.3., these guidelines).
- Copies of Loan Review Committee minutes or certified resolution recommending the loan must be in the loan files.
- Copies of the Board of Directors or Executive Committee minutes or certified resolution approving the loan must be in the loan files. Should the Grantee's state ARC office approve RLF loans before loan closing, place a copy of their approval in the loan file. The N/A block is used to reflect the applicability of either State ARC Office approval and/or Board of Directors approval.
- Conflict of interest certification: This certification provides ARC assurance that the loan decisions documented on The RLF Form were made solely on the merits of the project and not on the basis of relationships (employment, blood, marriage, or legal). The certification also attests to the belief that the information contained in The RLF Form is correct and complete.
- Required Attachments to The RLF Form: Attach copies of Loan Review Committee minutes or certified resolution, copies of Board or State approval as appropriate as evidence that this loan was authorized.
ARC Business Development RLF Guidelines | The RLF Form | Appendix B | Table B-1 | Schedule B-1 | Schedule B-2 | Schedule B-3 | Appendix C