Pub. 5 2017 Issue 2

9 Summer 2017 The Community Banker BIGSKY FINANCE (FORMERLYMONTANACOMMUNITY FINANCE CORPORATION) Featured Associate Member I ntroducing Big Sky Finance, a new name for two long-time companies that have merged into one. Effective June 1, 2017, Big Sky Economic Development Corporation (Big Sky EDC) and Montana Community Finance Corporation (MCFC) joined forces. MCFC merged under the umbrella of Big Sky EDC and together will be doing business as Big Sky Finance. Big Sky Finance currently handles a Re- volving Loan Fund for Yellowstone County, is certified by the US Small Business Admin- istration (SBA) to market, package, process, close and service the SBA 504 Loan Program (504 Loan Program) in the state of Montana and will also be looking to expand on other financing opportunities across the state. 504 Loan Program The 504 Loan Program stimulates private sector investment in long-term fixed assets in order to increase productivity, create and retain jobs, and increase the local tax base. The stimulus is provided with long-term, low down payment, fixed-rate loans to business- es. SBA 504 Loan Uses The loan funds from the 504 Loan Pro- gram may be used to finance the purchase of an existing building, construction of a new building, equipment with a useful life of at least 10 year and leasehold improvements. Who Qualifies for SBA 504 Loans Most businesses in Montana probably qualify for a 504 loan. The basic criteria busi- ness owners need to meet are they must be a for-profit operating business, small under SBA’s size requirements and going to occupy or actively use the property or equipment (“actively use” includes hotel/motel, residen- tial care facilities, mini storage facilities). SBA 504 Loan Financing Structure Big Sky Finance through the 504 Loan Program partners with lenders to provide up to 90% financing. The funding is typically 50% from the lender, 40% from the Big Sky Finance/504 loan and 10% from the business as outlined more fully in the chart below: SBA 504 Loan Debt Refinancing In addition to the standard SBA 504 loan financing, there are two debt refinancing options. The first option allows debt refi- nance if the project includes expansion of a business and the amount to be refinanced does not exceed 50% of the cost for the expansion. The second option allows debt refinancing without having to expand to qualify and any remaining equity may be used to pay for eligible business expenses. Advantages of 504 Loan Program Lender advantages include: • Lender approves and documents their own loan while Big Sky Finance works with SBA to process the 504 loan • Lender has a 1st lien position on the collateral • Lender’s collateral position is well secured, typically 50% loan to cost • Lender receives CRA credit Business advantages include: • Low down payment, typically just 10% • Fixed interest rate for term of loan • Long term loan Community advantages include: • The business creates and/or retain jobs in your community. Big Sky Finance Our mission is to provide financing op- portunities which stimulate the growth and expansion of small business and employ- ment in Montana. The Big Sky Finance main office is in Billings, with a satellite office in Helena. The staff includes four qualified, full-time professionals who are Brandon Berger, Business Finance Director, and Ben Rose, Loan Specialist, located in the Billings office; and Jo Ann Jones and Sherry O’Donnell, Loan Officers in the Helena office. Let our team answer any questions you may have or guide you thru the SBA 504 loan process. Check out our website at www.bigskyfinance.org or give us a call in Billings at 406-869-8403 or Helena at 406-441-5447 to find out more about the 504 Loan Program. *15% on special use properties or start-up businesses; 20% for special use properties and start-up businesses. **Up to $5,500,000 if a manufacturer or an energy goal is met. Project Costs Source Lien Funding Limits Rate Term (Real Estate) Term (Equipment) 50% Lender 1st No limit Market 10 years or longer 7 years or longer 40% Big Sky Finance / 504 Loan 2nd $50M to $5MM** Fixed 20 years 10 years 10%* Small Business