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

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Table of Contents

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 

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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?
  1. Will this loan be a watch list loan?

  2. Does the loan include any refinancing of any outstanding debt?

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

  4. Is the borrower a government entity or church?

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

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

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

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

  9. Does the borrower have more than 750 employees?

  10. Would the loan proceed without USBCI?

  11. 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? 

     

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

  13. Is the total loan size over $20 million?

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

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

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

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

  18.  Does the loan amount exceed the collateral amount?
Can you answer YES to all of the following questions?
  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?

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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.

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. 



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General Eligibility Requirements

Question 1


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

If ‘No’, go to #2


Question 2


If 750 or under, go to #3

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

Question 3


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

If ‘No’, go to #4

Question 4


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

If ‘No’, go to #5

Question 5


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

If ‘No’, go to #6

Question 6


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

If ‘No’, go to #7

Question 7


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

If ‘No’, go to #8

Question 8


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

If ‘No’, go to #9

Question 9


Go to #10

Question 10


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.

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Loan Amount Limits

Question 1


If $20 Million or less, go to #2

If greater than $20 MillionStop. The loan is ineligible for USBCI.


Question 2


If $3 million or less, go to #3

If over $3 millionStop. The loan is ineligible for USBCI.


Question 3


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

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


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Net Worth Requirements

Question 1


Go to #2

Question 2


If greater than $0, skip to #7

If less than $0 go to #3


Question 3


If ‘Yes’, go to #4

If NoStop 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


Go to #5

Question 5


If greater then $0, go to #6

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


Question 6


If ‘Yes’, go to #7

If NoStop The loan is ineligible for USBCI.  


Question 7


Go to #8


Question 8


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. 


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Owner Occupancy Requirements

Question 1


If Yes, go to #2.

If No, go to the next section/page

Question 2


If Purchase/Renovation go to #3.

If New Construction, skip to #4

Question 3


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

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

Question 4


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

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


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Guarantees

Question 1


If Yes, go to #2

If NoStop The loan is ineligible for USBCI. 

Question 2


If YesStop The loan is ineligible for USBCI.

If No, go to the next section/page 

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Refinance Question

Question 1



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

If No, go to the next page.

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Uses of Funds

Question 1


If  Yes, go to #2

If  No, Stop The loan is ineligible for USBCI. 

Question 2


Go to #3
 

Question 3


Go to #4
 

Question 4


If  Yes, go to #5.

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

Question 5


Go to #6.
Question 6


Go to #7
Question 7


If  any of the boxes are checkedStop The loan is ineligible for USBCI.

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

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Collateral Requirements

Question 1


Go to #2
 


Question 2


If  1.0 or less, go to #3

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


Question 3


If Yes, go to #4

If No, skip to #8
 


Question 4


Go to #5
 
Question 5


Go to #6
 
Question 6


Go to #7
 
Question 7


If  Yes, go to #8

If  No, Stop The loan is ineligible for USBCI. 

Question 8


Go to #9
 
Question 9


If  Yes, go to #10

If  No, skip to #11. 

Question 10


If  Yes, go to #11

If  No, Stop The loan is ineligible for USBCI. 


Question 11


If  Yes, Stop The loan is ineligible for USBCI.

If  No, go to #12

Question 12


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.


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Debt Service Coverage

Question 1


If  Yes, go to #2

If  No, Stop The loan is ineligible for USBCI. 


Question 2


If  Yes, Stop The loan is ineligible for USBCI.

If  No, go to #3.

Question 3


Go to #4
 
Question 4


Go to the next section/page
 

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Loan Structure, Rate, and Terms

Question 1


If  Yes, Stop The loan is ineligible for USBCI.

If  No, go to #2.

Question 2


Go to #3.


Question 3


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%.


Question 4


Go to #5.



Question 5


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.


Question 6


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.)


Question 7


Go to #8.

Question 8


Go to #9.


Question 9


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


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.

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Fees

Question 1


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.



Question 2

Question 3


Go to the next section.



Question 4


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.

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Information about the Bank Lender











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Information about the Business Being Financed






















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Information on Business Owners with 20% or More Ownership

Owner #1












Owner #2 (if applicable)












Owner #3 (if applicable)












Owner #4 (if applicable)












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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





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