COLUMBUS, Ohio –  The Ohio Statewide Development Corporation (OSDC) recently presented Ohio Laser with the SBA 504 Loan Project of the Year and Buckeye Shapeform with the Ohio 166 Regional Loan Project of the Year at their annual awards luncheon held at the Westin Hotel on February 8, 2012.

With an SBA 504 loan from OSDC, Ohio Laser added a new Trumpf Tubematic Laser cutting system to its arsenal. Industry experts consider this system to be one of the most advanced in the world. It is the first of its kind in Ohio and the Midwest.  This will allow manufacturers in many industries to benefit by outsourcing their work to Ohio Laser that can provide just-in-time production on frames, racks, trusses or any other item made from cut tubes.

 Buckeye Shapeform utilized financing from the Ohio 166 Regional Loan Program to purchase a CNC Turning Center to expand its capacity to produce deep draw products, often used for military applications and credited for the company’s recent growth. Deep draw technology creates seamless complex cylindrical shells, tubes and other shapes. The product components deliver superior integrity and optimal performance results that are critical for military and medical applications.

Also recognized by OSDC were Galen Kelch and James Holman as lenders of the year. Kelch joined The Community Bank in 2002 and has held various loan management positions and today is Vice President of Commercial Lending for the Southeastern Ohio region.  Kelch is a self-made expert in public financing programs and often will propose participating with an SBA, State of Ohio or local loan program in order to offer his customer a more favorable financing structure.  These efforts have earned him this second lender of the year award with OSDC.

James Holman was also named lender of the year by the OSDC. Holman is a seven year employee of Huntington National Bank. He has spent 5 years as branch manager of Huntington’s Heath office during which time Holman grew assets of his branch over $25 million.  He currently serves as the Assistant Vice President in the Newark office and has successfully partnered with OSDC numerous times to provide his customers the benefit of fixed rate, long term financing.

 OSDC’s final award was presented to Huntington National Bank as the Bank of the Year.   Huntington’s Lee Lemke, Business Banking Area Manager, accepted their award.  “ Huntington National Bank continues to demonstrate its commitment to the Ohio small business community as it maximizes the partnership opportunities with OSDC to provide its customers enhanced financing for their capital investments,” stated Dianne Allen, Executive Director of OSDC.

 About OSDC:

Ohio Statewide Development Corporation (OSDC) provides loans to small businesses that are growing and creating/retaining jobs throughout Ohio. OSDC is certified by the Small Business Administration and authorized by the Ohio Department of Development (ODOD) to provide small business loans under the 504 and 166 loan programs.

OSDC works in partnership with area lenders to provide long‐term, fixed rate, low down payment financing for expanding small businesses.

For more information, please contact OSDC Executive Director Dianne Allen at 614.481.3214 or via email at dallen@osdc.net.

1.    Financing Business Expenses (13 C.F.R. § 120.882(g)(6)(ii)) –A Borrower may now use its equity to finance eligible business expenses as part of the Refinancing Project provided that the amount of cash funds available to pay business expenses exceeds the amount to be paid to the lender of the Qualified Debt being refinanced. The Borrower’s application must include a specific description of the business expenses to be financed and an itemization of the amount of each expense.  “Eligible business expenses” means business expenses of the Borrower, such as salaries, rent, utilities, inventory, or other obligation of the business that were incurred, but not paid prior to date of the 504 Loan application or that become due for payment within 18 months after the date of the application.  Both the CDC and Borrower will be required to certify in the application that the funds will be used to cover the eligible business expenses of the Borrower.  The Borrower must, upon request, substantiate the use of funds to finance the business expenses (for example, through bank statements, invoices marked “paid,” cleared checks, etc.). The CDC should retain the evidence of business expenses in the loan file.

2.    Third Party Lender Loan (13 C.F.R. § 120.882(g)(5)) – The Third Party Lender Loan is no longer required to be at least 50% of the appraised value of the 504-eligible fixed assets.  Now, as in the regular 504 Loan program (13 C.F.R. § 120.920(a)), the Third Party Lender Loan must be at least as much as the 504 Loan.

3.    Qualified Debt “Substantially All (85%/15%) Use of Proceeds (13 C.F.R. § 120.882(g)(15)) – Because the Qualified Debt to be refinanced may have been refinanced one or more times previously with the Borrower using its equity at that time to finance working capital or other expenses, SBA has amended the regulation to provide that as follows:  if the Eligible Fixed Asset was originally financed through a commercial loan that would have satisfied the “substantially all” standard of 85% and was subsequently refinanced one or more times with the current commercial loan being the most recent refinancing, then the current commercial loan will be deemed to satisfy the “substantially all” standard.  The Borrower must certify that the existing debt satisfies the applicable requirements and the Third Party Lender must certify, as part of the 504 Loan application, that it has no reason to believe that the existing debt does not satisfy these requirements.

 On a random basis, SBA may require the Borrower and/or lender to submit additional documentation to support these certifications prior to closing the debenture, including the documents for the original loan used to acquire the fixed asset and subsequent refinancing documents to show that the current commercial loan is the most recent refinancing.  SBA will cancel an approved 504 Loan if the documents do not support the certifications.  If the Borrower and/or lender are unable to produce the additional documentation, each must certify that it has made a diligent search for the documents and that the documents are not in its possession. SBA will not cancel an approved loan solely because the Borrower and/or lender are unable to produce the documentation unless the lender is the original lender who made the original loan to acquire the 504-eligible fixed asset (and not a lender who acquired or merged with the original lender.)

This same change in the “substantially all” standard has also been made for the 504 permanent expansion debt refinance program (13 C.F.R. § 120.882(e)(1)).

4.    Percentage Occupancy (13 C.F.R. § 120.882(g)(15)(iii)) – The original loan may not have satisfied the percentage occupancy requirements of 51/49% for an existing building (13 C.F.R. § 120.131(b)) or 60/20/20% for new construction (13 C.F.R. §§ 120.131 and 120.870(b)). The final regulations provide that as long as the Borrower can demonstrate that it now occupies at least 51% of the building as of the date of 504 Loan application, the percentage occupancy requirements are met.

5.    Current on Payments (13 C.F.R. § 120.882(g)(15)(vii)) – The definition of “current on all payments due for not less than one year” has been amended to allow a Borrower to be deemed current as long as during the 12-month period prior to the date of 504 Loan application, no payment was more than 30 days past due under either the original payment terms or under modified payment terms (including deferments). Any modification of payment terms must have been agreed to in writing by the Borrower and lender prior to October 12, 2011 when the final regulations were published.  SBA reserves the right to decide whether modified repayment terms would preclude refinancing.

6.    6-Month Closing Period (13 C.F.R. § 120.882(g)(12)) – Temporary debt refinance 504 Loans must be disbursed within 6 months after Loan Approval unless an extension for good cause has been granted.  The SLPC has now been delegated the authority to approve extensions of the disbursement period up to an additional 3 months for good cause.

Ohio Statewide Development Corporation (OSDC) was thrilled to receive the “2011 Large Certified Development Corporation of the Year” from the US Small Business Administration (SBA) during their National Small Business Week awards ceremony on May 20, 2011.

The three-day event at the Mandarin Oriental Hotel and Conference Center highlighted business owners from 50 states, the District of Columbia, Guam, Puerto Rico and the Virgin Islands, whose business achievements have contributed to job creation, the economy and to the nation’s recovery.  “Our partners in lending and investing are pivotal in helping small businesses create jobs and fuel our economy,” said SBA Administrator Karen G. Mills.  “One key factor is the financial assistance provided to underserved communities and these honorees have excelled at that.”

This year, National Small Business Week honored three banks, two certified development companies and one credit union.  The nominees were chosen based on their loan portfolio’s superior performance determined by five risk benchmarks set by the SBA.  Of the 275 certified development corporations in the United States, OSDC was awarded the Large Development Corporation of the Year.  In Fiscal year 2010, OSDC made $8.5 million in SBA 504 loans, of which $550,000 went to underserved markets.  Ms. Mills presented the award to Laura Frum, Senior Loan Officer for Ohio Statewide Development Corporation and Michael DiPerna, President of Ohio Statewide Development Corporation (see attached photo) at the awards ceremony. 

Ohio Statewide Development Corporation (OSDC) provides loans to small businesses that are growing and creating/retaining jobs throughoutOhio.  OSDC is certified by the Small Business Administration and authorized by the Ohio Department of Development (ODOD) to provide small business loans under the 504 and 166 loan programs. 

OSDC works in partnership with area lenders to provide long-term, fixed rate, low down payment financing for expanding small businesses.

For more information, please contact OSDC Executive Director Dianne Allen at 614.481.3214 or via email at dallen@osdc.net.

SBA press release: Six Lenders and Two Investment Companies Recieve Top SBA Recognition at National Small Business Week 

For a SBA FAQ regarding the program, please follow the link below.

http://www.sba.gov/content/faq-new-temporary-504-refinancing-program