1. NADO ATC
Small Business Lending
SC Case Study

2. NADO ATC
 Catawba Regional COG/Catawba Regional
Development Corporation
◦ $53 million of loans originated
◦ $123 million of private capital leveraged
◦ 2,100+ SC jobs created or preserved
◦ $25MM of loan assets
under management

3. NADO ATC
 Products and Coverage
 SBA 504 – statewide lender
 EDA RLF – 18 Counties – expanded in 2012/2013
◦ Assumption of Economic Development Administration
(EDA) Revolving Loan Funds (RLF) from: Lowcountry,
Lower Savannah, and Santee-Lynches COG regions
 USDA IRP – 9 counties
◦ 5 new counties with Santee
Lynches IRP debt assumption
 Brownfields RLF Fund Manager
◦ Statewide lender, capitalized
by US Environmental
Protection Agency (EPA)

4. NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ POLICY MAKERS:
 Strategy and buy-in with COG Boards (old and new fund
managers)
 New fund manager commits to market in old territory,
although loans can be made based upon market demand
 Resolutions of support from both COG Boards
 Preparation and approval of amended RLF Plan
 EDA provides grant assumption documentation for both
organizations

5. NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ LOAN ADMINISTRATION/FINANCE
 New fund manager does initial file, legal, and
documentation reviews
◦ Preferably with existing fund manager staff
◦ Include finance staff - balance sheet impact for both
organizations
 Legal Review
◦ All existing loans:
 Documents – including note, loan agreement, security
agreement, mortgages/deeds of trust, UCC filings
 Validity, priority and outstanding amount of existing liens
and/or mortgages
 Loan and security documents to determine if loans are
assumable

6. NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ LOAN ADMINISTRATION/FINANCE
 Credit/Underwriting
◦ Current and Past Financial Information:
 Review borrowers’ financial statements (if available) for cash flow
coverage
 Determine collateral adequacy (appraisals in file, current tax value,
other)
 Payment performance, and guarantor support
◦ Personal Financial Statements, guarantor tax returns (if available)
 Communicate with third party entities (i.e. insurers) to ensure
coverage remains in place for hazard, life, etc.
 Based upon Legal and Credit/Underwriting reviews:
◦ Loan write-downs are done by mutual agreement at portfolio
assumption (by either old or new fund manager/lender)

7. NADO ATC
 EDA RLF Consolidation – SC Lessons Learned
◦ EXISTING CUSTOMERS AND PROSPECTS:
 Communications with customers
◦ Written and verbal from existing fund manager and new fund
manager
◦ Personal introductions (when feasible) to customers by new fund
manager/servicing staff
◦ New servicing staff aggressively, but nicely, introduces reporting
requirements and payment processes
◦ If mistakes occur, remedy quickly and firmly
 Marketing in new areas:
◦ Leverage existing banking and board relationships
◦ Economic development partners
◦ Referrals (establish point person) from old fund manager to pass
quickly to new fund manager

8. NADO ATC
 Summary
◦ Economies of scale exist
◦ Request time to deploy new capital
 Developing new territories and relationships requires
patience and time
◦ Things will happen which you don’t expect (good
and bad)
◦ Common Solution: Better to have a larger capital
pool to serve the state than for funds to be
sequestered
◦ Questions?