Community Reinvestment Fund, USA
Loan Programs

Evergreen's New SBA 504 Loan "Look-a-Like" Programs

Evergreen now offers CRF, USA loan programs as alternatives when businesses or projects don't qualify for SBA 504 loans:

• New Markets Tax Credit Loan Program

• Business Loan Program

Funds for these programs come from CRF, USA rather than the SBA.

SBA 504 & CRF, USA Loan Program Comparison Sheet

Who is Community Reinvestment Fund, USA?

• CRF, USA is a Minneapolis-based national nonprofit organization.

• They are the nation’s leader in bringing capital to public and private nonprofit community development lenders through the secondary market for loans.

• They purchase economic development and affordable housing loans and pool them into asset-backed debt securities and New Market Tax Credit investment funds sold to institutional investors.

The CRF, USA Loan Programs are similar to the SBA 504 program in that they:

• provide a lower interest rate, lower equity injection, and a longer term than conventional financing.

• Require a first mortgage lending partner to participate.

However, unlike the 504 program:

• Funds can be used for any business purpose, including refinance, cash out, asset purchase, etc., as long as it is secured by the project real estate or equipment.

• Program may be used by non-profits.

• Generally, the rates are not quite as low as the 504 program and not fixed for 20 years.

New Markets Tax Credit Loan Program

Financing the purchase, renovation, and construction of owner-occupied commercial real estate and equipment for for-profit and non-profit businesses located in qualified low income communities and areas of economic distress in Alaska, Oregon, Washington, and the panhandle of Idaho.

The "New Markets Tax Credit" is a federally sponsored investment vehicle designed to deliver capital to low income communities. It provides tax subsidy, in the form of a federal tax credit, to entities that make certain kinds of capital investments in these communities. This is a way to encourage reinvestment in low income communities and enhance total return on investment, thereby creating jobs and business activity that would not otherwise exist.

Eligibility:

Unique Requirements:

• Borrowers must qualify as a "Qualified Active Low-Income Community Business": at least 50% of employees and at least 50% of tangible property owned and leased by the business must be located in qualifying low-income census tract

• Be located in an "Area of Greater Economic Distress". 

Evergreen understands these unique requirements and can determine if a business location is eligible.

Credit Requirements:

• Management experience

• Good credit experience with positive credit history

• Comparison to RMA Ratios

• Operating ratios in line with industry norm

• Historic cash flow & debt service capability

• Overall Financial Strength

Loan Size:

• Minimum: $50,000.

• Maximum: $1,500,000 with larger amounts considered by exception

Valuation:

• Current appraisal required for financing packages in excess of $250,000. Alternative valuation method may be used for loans less than $250,000.

Owner-Occupancy:

• Operating Company must occupy at least 51% of the real estate financed

Loan-to-Value Ratio:

• 90% or less for general purpose real estate loans

• 85% or less for special purpose real estate loans

New Markets Tax Credit Loan Program Terms,
Secured by Real Estate

Interest Rate:

• Minimum initial rate to the borrower is based on 7-year Treasury rate plus 190 basis points plus a 50 basis point servicing fee, fixed for 7 years. 

• Actual loan rate to the borrower will typically be set two days prior to loan closing. 

• Rate is reset at 7-year anniversary, based on 10-year Treasury plus 335 basis points plus a 50 basis point servicing fee.

Loan Term:

• 25-year amortization and term.

Loan Fees:

• Origination fee varies from 1% to 2% based on the loan amount. 

• CRF charges $700 in document preparation and set-up fees.

Prepayment Penalty:

• No partial prepayments are allowed.

• Upon a full prepayment prior to the seventh anniversary date, a prepayment penalty will be due.

Payments:

• All borrowers must agree to remit loan payments by automated payment/debit.

Security:

• Loan must be secured by a first or second lien on the real estate being financed.

Borrower Guarantees

• Personal guarantees required of all owners with more than 20% ownership of the business and/or property.

• Exceptions considered on a case-by-case basis. 

• Corporate guarantee of the operating company required if borrower is an LLC or LP. 

• A commitment by borrower to remain in compliance with the Qualified Active Low-Income Community Business requirement for 7 years.

New Markets Tax Credit Equipment Loans Terms,
Secured by Equipment

CRF has a separate New Markets Tax Credit Loan Program for equipment.

• Major equipment with a minimum value of $50,000 and useful life of 5 years

• 7 year amortization & term

• Advance Rate & Loan to Value Ratio:
  80% for new or 50% on used

• Valuation: invoices for new or appraisals for used

• Other terms and conditions are generally the same as the real estate program.

• Contact Evergreen for other pricing and terms details.

CRF Business Loans

Financing the purchase, renovation, and construction of owner-occupied commercial real estate and equipment for for-profit and non-profit businesses that can demonstrate community impact in Alaska, Oregon, Washington, and the panhandle of Idaho.

• Similar to 504, New Markets Tax Credit Real Estate & New Markets Tax Credit Equipment loans

• Must demonstrate Community Impact including: job retention and creation, revitalization or stabilization of low- to moderate-income communities, project locations in targeted business development areas, serving disadvantaged populations as business owners, or serving not-for-profit businesses.

• $50,000 to $1,000,000 loan size

• Rates set daily over several treasury indexes

• 20-year maximum term

• 10% to 15% down payment

• 2% origination fee

• 1.5% prepayment penalty

• Partial prepayment possible

Please contact your local Evergreen Loan Officer for more information.