An Evaluation outlines present and future opportunities to determine financial viability. Our third party approach adds credence and credibility to the client’s efforts. Based on data collected during the Evaluation, a comprehensive report is developed to provide vital information to investors and lenders.
This confidential report titled “Review for Financial Viability” is initially comprised of 100+ pages of information. From this, we create a 25-35 page condensed version of the larger document. This condensed version emphasizes the relative facts, and informs readers of the opportunities without all the superfluous details.
Typical procedure for public funding
The USDA guarantee loan program is complicated and confusing, but also can be flexible with different approaches. Our assignments are to complete a Feasibility Report to be shared with lenders, buyers or investors. This includes several visits to the projects and meetings with client, lenders, nonprofit, attorney and introduction to USDA. After an informal meeting, an Application is submitted to USDA area office, and they review reports / application, then forward to state office. One can expect USDA to ask questions and we will answer their questions and address their concerns. New owner’s bylaws and local community support are important steps.
Required reports are typically completed within two months including. Some clients may already have some of these reports, therefore, may not be necessary to complete a new one.
- Feasibility Report
- Marketing Assessment
- Site or Design Review
- Management Business Report
A normal timeline usually follows this sequence:
- USDA (State and National offices) will take two-three months to review
- USDA relationship is with the lender – not consultants
- USDA considers consultants an independent supportive opinions
- Assignments normally ends upon introduction of lender to USDA
- SCLtd stays involved (up to six months) to assist client with closing
- SCLtd is not directly involved in the closing process, but active from the sidelines
- Due to confidential nature Spear Consultants is limited in discussing other projects
- USDA wants to know if projects are in an eligible area
- Does it have local elected officials’ support
- Only a municipally, non-profit or Indian tribes are eligible under CF program
- Has the non-profit attorney prepared acceptable bylaws
- Who are potential Board Members of non-profit
- USDA attorneys determine if the non-profit (borrower) is eligible
- USDA needs a bank (local or regional) interested in making a guarantee loan
- SCLtd ask USDA for an informal meeting with consultants to introduce our project
- SCLtd review draft reports with the client, then prepare final to be shared with others
- Are there any conflicts of interest and does the project have community support
- USDA will ask if consultants have a vested interest or any success fees
- Is there a Confidentially Agreement
- Is there community support for this project
- Future USDA meetings are primary with the bank
- Sometimes a loan facilitator is employed as a go-between with bank and USDA
- The state office reviews and sends to national office for approval
- Under USDA – CF is Communities Facilities. B&I is Business and Industries
- SBA is Small Business Administration and used primarily for golf courses
With each assignment I sign a Confidentially Agreement. While I do use project’s name, I do not discuss financial aspects or status of our efforts with others. Clients do not want me to discuss their projects with outside parties. When meeting with others I do not speak for my client, but I do speak on their behalf. While responsible for my report, I cannot be responsible its use by others (lenders, government, investors).