5.0. EDSR 07-08-2002 - Laserfiche WebLink

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CREDIT CRITERIA • Equity or Cash Requirements: • Loan applicants must demonstrate an acceptable level of project equity, with a minimum of 10% equity provided by the borrower. Subordinated debt within the same project financing may be considered as additional equity, subject to an intercreditor agreement. All other criteria will apply, including subordinate debt, when calculating debt coverage. Collateral Requirements: • Loan collateral coverage must be at least 100% of the MCCF loan amount on appraised value of assets, less all senior debt. • MCCF will consider the following collateral positions: first security interest, shared first security interest, subordinated security interest and shared subordinated security interest. Debt to Worth: • MCCF will consider financing projects that have a tangible net worth ratio on an actual and proforma basis of no greater than 10 to 1 (10% project equity or greater). Each project shall be analyzed on its own merits and its ability to service both existing and new debt. • MCCF borrowers (real estate holding companies excluded) should have a tangible net worth of 5 to 1 or less, based upon their most recent financial statements and, on a proforma basis, reflecting the new proposed debt. Personal Guarantees: • Personal guarantees will be required for all owners with 20% or greater ownership in closely held businesses. Management Experience & Company Performance: • The MCCF will require that the project have capable, skilled management through experience or expertise in the applicant's industry, either through previous successful business ownership or through appropriate managerial support services. Borrowers having erratic or undocumented earnings, or borrowers having new and unproven management, will require more loan risk sharing by the MCCF member originating the loan. Repayment Ability: • Applicants must demonstrate adequate historical cash flow showing trends that support debt service coverage of at least 1.1 to 1. Proforma financial cash flows must also • support debt service coverage of at least one to one. 2