MoFi Utah Small Business Credit Initiative Loan Participation Application for Banks and Credit Unions

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Page 1 - Table of Contents

Page 2 -Initial Should You Proceed Questions

Page 3 - Instructions

Page 4 - General Eligibility Requirements

Page 5 - Loan Amount Limits

Page 6 - Net Worth Requirements

Page 7 - Owner Occupancy Requirements

Page 8 - Guarantees

Page 9 - Refinance Covenants

Page 10 - Uses of Funds

Page 11 - Collateral Requirements

Page 12 - Debt Service Coverage

Page 13 - Loan Structure, Rate, and Terms

Page 14 - Fees

Page 15 - Information about the Bank Lender

Page 16 - Information about the Business Being Financed

Page 17 - Information on Business Owners with 20% or More Ownership

Page 18 - Document Uploads

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

If you can answer NO to the following 18 questions and YES to the additional question, you may be eligible for USBCI Funding and should proceed and complete the rest of the application.

Can you answer NO to all of the following questions?

Does the loan amount exceed the collateral amount?

Does the loan include any refinancing of any outstanding debt?

If commercial real estate is being financed, will the business occupy less than half of the space?

Is the loan going to be used for any of the following:
- Land development or speculative venture?
- Blue Sky/Goodwill?
- Payment of taxes?
- Reimbursement or distribution to an owner?
- Refinance of existing debt?

Would the loan proceed without USBCI?

Will the loan be a revolving line of credit OR structured with a maturity of over 20 years?

Does the borrower have more than 750 employees?

Does the borrower or any owners with more than 20% ownership have a negative net worth?

Is the total requested participation amount greater than $3 million?

Is the total loan size over $20 million?

Will the loan include a government guarantee (SBA, USDA, etc)?

Will there be any owner with more than 20% ownership who will NOT be guaranteeing the loan?

Does the borrower or its owners or the family members of the owners have any affiliation to the lender?

Is the borrower a government entity?

Does the business derive more than 1/3 of its revenue from gambling?

Is the business involved in any pyramid sales or illegal activities?

Does the borrower earn more than half of its annual net revenue from lending activities?

Will this loan be a watch list loan?

Can you answer YES to all of the following questions?

If the loan involves an investor-owned property, does the property independently cash flow with a debt coverage ratio at at least 1 to 1 on a 20 year amortization?

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

This compliance memo is being provided to lenders to help guide the underwriting and structuring of a loan to comply with the USBCI policies. MoFi is happy to complete this form for each loan submitted, but in an effort to reduce the time lenders are spending asking questions and restating terms and memos, the MoFi team is providing it for lenders who would like a more detailed checklist. This document looks very long, but it is mostly ‘yes’ or ‘no’ or single word answers. It takes MoFi staff members about 30 minutes to complete a memo for each loan, and it will likely be much quicker for the lender who is familiar with the loan. If you find this to be less time consuming than emailing back and forth with MoFi staff, please fill this out and submit it with your loan credit memo and approval. We are always here to help you and our contact info is on the footer of each page of this memo.

Instructions

Please fill out fields. If a Credit Memo page number is requested after a field, the USBCI program requires the information be in the lender’s credit memo. For example, on Question 1 on the next page, the lender is asked if any bank policy exceptions were needed for this loan. The bank’s credit memo is required to state that the loan was within the bank’s policies and did not have exceptions.

Saving your form: We do not expect that you will complete this form in one sitting. So please make sure to save your form before you exit! After you select "Save my Progress", you will be asked to enter an email and password. To resume the form you will need to click the link in the email that you are sent and enter the password.

Name of the Lender

Name of the Business

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

General Eligibility Requirements

Question 1

1. Is the loan classified as watch, substandard, doubtful, loss or similar category on the bank's internal watch list?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #2

Credit Memo Page #

Question 2

2. How many FTEs does the borrowing business have?

If 750 or under, go to #3

If over 750 ,Stop. The loan is ineligible for USBCI.

Question 3

3. Does the borrower or any owners with 20% or more ownership have any affiliation (officer, director or principal shareholder, or an immediate family member of any of the categories) to the lender?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #4

Question 4

4. Is the Borrower a State-regulated charitable, religious, or other non-profit or philanthropic institution; government-owned corporation; consumer and marketing cooperative; or a faith-based organization, unless the project is for a “business purpose”?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #5

Question 5

5. Does the borrower earn more than half of its annual net revenue from lending activities, unless the business is (1) a CDFI that is not a depository institution or a lender holding company, or (2) a Tribal enterprise lender that is not a depository institution or a lender holding company

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #6

Question 6

6. Is the business involved in any pyramid sales?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #7

Question 7

7. Does the business derive more than 1/3 of its revenue from gambling?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #8

Question 8

8. Is the business involved in illegal activities?

If ‘Yes’, Stop The loan is ineligible for USBCI.

If ‘No’, go to #9

Question 9

9. Describe what the business does

Go to #10

Question 10

10. Why does the bank or business NEED the USBCI participation?

If the answer is that the bank and borrower do not need the USBCI funding, Stop The loan is ineligible for USBCI.

If the bank or borrower needs the USBCI funding, proceed to the next section/page.

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Loan Amount Limits

Question 1

1. What is the total loan size including the USBCI participation?

If $20 Million or less, go to #2

If greater than $20 Million, Stop. The loan is ineligible for USBCI.

Credit Memo Page #

Question 2

2. What is the total participation amount requested from the USBCI program?

If $3 million or less, go to #3

If over $3 million, Stop. The loan is ineligible for USBCI.

Credit Memo Page #

Question 3

1. What is the answer to #2 (participation amount) divided by the answer to #1 (total loan amount)?

If .5 or less or less, go to next page

If over .5, Stop. The loan is ineligible for USBCI.

Credit Memo Page #

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Net Worth Requirements

Question 1

1. Is the net worth or total equity of the business being financed greater than $0?

Go to #2

Question 2

2. What is the net worth or total equity of the business being financed?

If greater than $0, skip to #7

If less than $0 go to #3

Credit Memo Page #

Question 3

3. Is the business being financed by a real estate holding company?

If ‘Yes’, go to #4

If No, Stop The loan is ineligible for USBCI. (The USBCI program requires the business to have a positive net worth. An exception can be made for a REHCO with a negative net worth and an affiliated operating company with a positive net worth that results in a positive net worth for the combined entities.)

Question 4

4. What is the name of the affiliated operating company(s)?

Go to #5

Question 5

5. What is the net worth/equity of the affiliated operating company?

If greater then $0, go to #6

If less than $0, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 6

6. Will the affiliated operating company(s) be a guarantor or coborrower for the loan?

If ‘Yes’, go to #7

If No, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 7

7. How many owners of the business have more than 20% ownership?

Go to #8

Credit Memo Page #

Question 8

8. List the net worth of each owner (individual or corporate) with ownership over 20%

If any of the owner(s) have a negative net worth, Stop The loan is ineligible for USBCI.

If all owners have a positive net worth, go to the next section.

Credit Memo Page #

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Owner Occupancy Requirements

Question 1

1. Will the loan be used for a commercial real estate purchase, renovation, or construction?

If Yes, go to #2.

If No, go to the next section/page

Question 2

2. Will the loan be used for (1) A real estate purchase/renovation OR (2) New construction?

If Purchase/Renovation go to #3.

If New Construction, skip to #4

Question 3

3. What percentage of the real estate being purchased/renovated will the affiliated operating company(s) occupy?

If 50% or less, Stop The loan is ineligible for USBCI.

If 51% or greater, go to the next section/page

Question 4

4. What percentage of the new real estate being built will the affiliated operating company(s) occupy?

If 59% or less, Stop The loan is ineligible for USBCI.

If 60% or greater, go to the next section/page

Credit Memo Page #

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Guarantees

Question 1

1. Will all owners with 20% or more ownership guarantee the loan?

If Yes, go to #2

If No, Stop The loan is ineligible for USBCI.

Question 2

2. Does the loan include an SBA, USDA or other public agency guarantee?

If Yes, Stop The loan is ineligible for USBCI.

If No, go to the next section/page

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Refinance Question

Question 1

1. Will any of the proposed financing be used to refinance existing debt?

If Yes, Stop, the loan is ineligible for USBCI.

If No, go to the next page.

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Uses of Funds

Question 1

1. Will the loan be used for a commercial purpose?

If Yes, go to #2

If No, Stop The loan is ineligible for USBCI.

Question 2

2. What is the primary purpose of this loan (i.e. CRE purchase, equipment purchase, tenant improvements, building rehab, CRE construction, working capital, etc.)?

Go to #3

Question 3

3. What is the secondary purpose of this loan (if applicable)?

Go to #4

Question 4

4. Does the credit memo detail the uses of the loan proceeds?

If Yes, go to #5.

If No, please add this to the credit memo and go to #5

Credit Memo Page #

Question 5

5. What amount of cash equity, if any, is the borrower contributing to the project?

Go to #6.

Question 6

6. Is there a Buy/Sell or Purchase Agreement?

YesNo

What is the Expiration Date?

Go to #7

Question 7

7. Check the boxes below if any proceeds will be used for the purpose listed:

Land development or speculative ventureBlue SkyGoodwillRepay delinquent federal or state income taxes that are not on a payment planTaxes held in trust or escrowReimburse any owner or purchase an ownership interest in the businessRefinance of Existing Debt
If any of the boxes are checked, Stop The loan is ineligible for USBCI.

If all of the boxes are unchecked, go to the next section/page.

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Collateral Requirements

Question 1

1. What is the total value of the collateral pledged for the loan?

Go to #2

Credit Memo Page #

Question 2

2. What is the LTV?
Total loan amount divided by the answer to #1 above (total collateral value)

If 1.0 or less, go to #3

If greater than 1.0, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 3

3. Is Real Estate being taken as collateral?

If Yes, go to #4

If No, skip to #8

Credit Memo Page #

Question 4

4. What is the real estate address(s) that will be taken as collateral?

Go to #5

Question 5

5. What is the lot size?

Go to #6

Question 6

6. What is the legal description?

Go to #7

Question 7

7. Will there be an ALTA (or ALTA equivalent) title insurance policy on the real estate collateral?

If Yes, go to #8

If No, Stop The loan is ineligible for USBCI.

Question 8

8. If the real estate being taken as collateral is being leased by an operating entity from a holding company with common ownership, what is the square footage of the building?

Go to #9

Question 9

9. Does the loan include personal property or FF&E?

If Yes, go to #10

If No, skip to #11.

Question 10

10. If yes, will the loan include a UCC filing?

If Yes, go to #11

If No, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 11

11. Does the loan contain a cross-collateralization provision with the lender’s other loans?

If Yes, Stop The loan is ineligible for USBCI.

If No, go to #12

Question 12

12. Will the bank have controlled borrower bank accounts?

If Yes, The terms of the control agreements must be stated in the lender term sheet. Go to next page.

If No, go to next page.

Credit Memo Page #

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Debt Service Coverage

Question 1

1. If the loan involves an investor-owned property, does the property independently cash flow with a debt coverage ratio at at least 1 to 1 on a 20 year amortization?

If Yes, go to #2

If No, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 2

2. Will the lender’s participation agreement with the CDFI contain any provisions that make any of the bank’s interests in the loan’s repayment superior to that of the CDFI, whether through normal payments by the borrower or through collateral liquidation and guarantor collections?

If Yes, Stop The loan is ineligible for USBCI.

If No, go to #3.

Question 3

3. What is the gross revenue of the business being financed (Note: can use the most recent completed FY or YTD)?

Go to #4

Question 4

4. What is the NOI of the business being financed(Note: can use the most recent completed FY or YTD)?

Go to the next section/page

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Loan Structure, Rate, and Terms

Question 1

1. Will any of the loan proceeds be allowed to revolve (i.e. be lent to the borrower, repaid by the borrower, and then relent to the borrower)?

If Yes, Stop The loan is ineligible for USBCI.

If No, go to #2.

Question 2

2. Is the bank’s rate (1) Fixed or (2) Variable?

Go to #3.

Credit Memo Page #

Question 3

3. Is there an interest rate cap?

If Yes, go to #4.

If No, Stop The loan is ineligible for USBCI. The rate cannot exceed the National Credit Union Act cap which is currently at 18%.

Credit Memo Page #

Question 4

4. What is the bank’s initial interest rate?

Go to #5.

Credit Memo Page #

Question 5

5. What is the blended interest rate of the loan (lender portion blended with USBCI portion)?

If greater than 18% (the current National Credit Union Act cap), Stop The loan is ineligible for USBCI.

If less than 18%, go to #6.

Credit Memo Page #

Question 6

6. What is the maturity of the loan in months?

If 240 months or less, go to #7.

If more than 240 months, Stop The loan is ineligible for USBCI. (Note: maturity does not need to match amortization.)

Credit Memo Page #

Question 7

7. What is the loan type: 1. Term or 2. Term with Initial Interest Only Period?

Go to #8.

Question 8

8. What USBCI participation interest rate is shown in the lender credit memo?

Go to #9.

Credit Memo Page #

Question 9

9. Does the USBCI participation interest rate comply with the following chart?

Amortization	Rate
0 – 35 months	.50%
36-59 months	1.0%
60-83 months	1.5%
84-119 months	2.0%
120-179 months	2.5%
180-240 months	3.0%

If Yes, go to #10.

If No, Stop The loan is ineligible for USBCI and needs to be restructured.

(Note: The maximum amortization for this program is 20 years.)

Question 10

10. How will the loan be disbursed – (1) Over Time OR (2) Fully at Closing?

If Over Time, confirm that the loan will not revolve, and go to next section/page

If Fully at Closing, go to next section/page.

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Fees

Question 1

1. What are the total upfront fees for closing charged to the borrower (origination and closing costs - regardless if they are paid out of pocket or financed) in dollars and as a percentage of the total loan?

For loans under $25,000:
If the fees are $750 or less, go to #2.

If the fees are over $750, Stop The loan is ineligible for USBCI.

For loans of $25,000 or more:
If the fees are 3% or less, go to #2.

If the fees are over 3%, Stop The loan is ineligible for USBCI.

Credit Memo Page #

Question 2

2. Please List the Fees and the Associated Dollar Amounts the Bank Will Charge

Question 3

3. Lenders may charge an annual servicing fee of up to .5% on the entire loan (lender and USBCI portion) for managing the payments to the CDFI. What annual fee is the bank charging (this can be ‘no fee’)?

Go to the next section.

Credit Memo Page #

Question 4

4. Does the USBCI Participation Loan have a pre-payment penalty?

If ‘No’, go to next section/page

If 'Yes', Stop The loan is ineligible for USBCI. The USBCI Program does not allow loans that have a pre-payment penalty.

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Information about the Bank Lender

Bank Name	Loan Officer Name
EIN	Loan Officer Email
Phone Number	Loan Officer Phone Number
Street Address City

State

Zip

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Information about the Business Being Financed

Business Legal Name	Business Representative Name
Street Address	Business Representative Title
City State Zip County Phone Number Email Address Business Email Address Full Address (Street, City, State, and Zip) of the Project (if different from Business Address above) Please provide: 1) background on the business 2) background on owners 3) how this loan will have a positive impact on Utah 4) anything else unique or impactful about this loan.	Number of Jobs that the business is expected to create Number of Jobs that would be lost without this financing (if any). Jobs may only be counted here if they would truly be lost if the financing failed to go through. Number of Construction Jobs created by the financing (if any) Business NAICS Code Business Legal Type Business EIN Number Business Utah Entity Number Year Business Opened

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Information on Business Owners with 20% or More Ownership

Owner #1

Name Street Address City State	Title Percent Ownership
Zip

Owner #2 (if applicable)

Name Street Address	Title Percent Ownership
City State Zip

Owner #3 (if applicable)

Name

Street Address

City

Title

Percent Ownership

State

Zip

Owner #4 (if applicable)

Name Street Address	Title Percent Ownership
City State Zip

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Document Uploads

Please upload the Credit Memo and Credit Memo Approval as well as any other documents you think are pertinent.

We will also need a copy of the first 2 pages (showing filing status, AGI, etc.)

for the most recent personal tax return and a Credit Report for all business owners owning 20% of the business or greater. If there is more than one business owner over 20% ownership, please upload taxes for them using the Additional Documents button.

Document Upload

Credit Memo

Credit Memo Approval

First 2 Pages of Most Recent Tax Return - Majority Owner

Credit Report - Majority Owner

Additional Documents

Questions? Call MoFi at 844-728-9234 and ask for Mary (225) or Abigail (252)

Emails are MaryM@mofi.org and AbigailH@mofi.org

We are ready to help!

Please enter the email where you would like a copy of this to be sent before you click Submit!

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