WHEDA State Small Business Credit Initiative 2.0 Overview

undefined
 
STATE SMALL BUSINESS CREDIT
INITIATIVE 2.0
 
WHEDA – CDFI ROUNDTABLE
undefined
 
AGENDA
 
1.
Who is WHEDA?
2.
WHEDA 
 SSBCI Products
3.
Application Process
4.
CDFI Compliance Requirements
5.
How to Participate
6.
Call to Action
7.
Q&A
undefined
 
WHO IS WHEDA?
 
WHEDA works closely with lenders, developers, local government,
nonprofits, community groups, and others to implement its low-cost
financing programs.
 
Mission
WHEDA’s mission is to stimulate the state’s economy and improve the
quality of life for Wisconsin residents by providing affordable housing and
business financing products.
 
Vision
We provide the tools to help people and communities realize their hopes
and dreams.
 
Overview of WHEDA-funded SSBCI Products
 
Loan Participation Program (LPP)
WHEDA will buy an interest in loans made by participant lenders to small businesses
Collateral Support Program (CSP)
WHEDA will make a collateral support contribution of up to 20% of the total, which will
collateralize the Borrower’s loan, enabling start-ups to help their businesses grow
Capital Access Program (CAP)
Program administered by WHEDA in collaboration with Milwaukee Economic Development
Corporation (MEDC) that provides portfolio insurance in the form of a loan loss reserve
fund to lenders that make small business loans
 
 
 
 
undefined
 
LOAN PARTICIPATION
PROGRAM (LPP)
 
Loan Participation Program (LPP)
 
HOW IT WORKS
1.
CDFI sources the loan
2.
Applies to WHEDA for participation with SSBCI funds
3.
WHEDA verifies SSBCI eligibility
4.
Loan Participation Agreement is signed
5.
Loan is funded
6.
CDFI remits principal repayments, 
quarterly
7.
CDFI remits program data required for SSBCI compliance, 
quarterly
 
 
 
 
Loan Participation Program (LPP)
 
TERMS
Primary Lender originates loan, WHEDA purchases up to 
10% 
of loan​
WHEDA's participation may vary from time to time based on program liquidity – targeted
participation range
 is 
$25,000 - $200,000
Rates, fees, and terms are established by Primary Lender​
WHEDA participation will be at 0% interest to provide better DCR. WHEDA's maximum
loan term is seven years
WHEDA loan will be in first loss position, and Primary Lender will have first claim to all
recoveries​
Primary Lender has option to repurchase participation sold to WHEDA at any time
 
 
 
 
 
undefined
 
COLLATERAL SUPPORT
PROGRAM (CSP)
 
Collateral Support Program (CSP)
 
HOW IT WORKS
1.
CDFI sources the loan
2.
Applies to WHEDA for collateral support with SSBCI funds
3.
WHEDA verifies SSBCI eligibility
4.
Primary Lender closes the loan
5.
CSP funds are provided to Primary Lender to be held in a Lender held account until
prepayment or maturity, at which point funds are returned to WHEDA
6.
CDFI remits program data required for SSBCI compliance, 
quarterly
 
Collateral Support Program (CSP)
 
TERMS
Primary Lender originates loan, WHEDA makes a collateral support contribution of up to
20%
 
of total to collateralize Borrower's loan​. 
WHEDA's maximum
 deposit is 
$75,000
Underwriting and servicing performed by Primary Lender, underwriting is shared with
WHEDA for review and approval prior to commitment​
Funds will be held in an account at Primary Lender's institution while deployed
Funds will be returned to WHEDA after initial term 
or upon repayment of loan. Maximum
term is 7 years
In the event of a loss of the lead lender's of program funds
, 
the lead lender must
liquidate 
all 
available collateralized assets before accessing the collateral reserve funded
by WHEDA
 
undefined
 
CAPITAL ACCESS
PROGRAM (CAP)
 
Capital Access Program (CAP)
 
HOW IT WORKS
1.
Program will be administered by WHEDA in collaboration with Milwaukee
Economic Development Corporation (MEDC)
2.
The Primary Lender applies to MEDC and submits a loan fee
3.
MEDC applies to WHEDA for capital access funded by SSBCI
4.
WHEDA verifies SSBCI eligibility
5.
The Primary Lender completes a Participation Agreement with MEDC
6.
Capital access funds are provided to MEDC to be placed in loan loss reserve
account at Primary Lender institution
7.
MEDC remits program data required for SSBCI compliance, 
quarterly
 
Capital Access Program (CAP)
 
TERMS
Loan is underwritten by Primary Lender using their 
own terms
  ​
SSBCI fund may be used to match between 3% and 7
% depending on the loan size,
 or
the combined total of the lender/borrower contribution​
Funds will be used to establish loan loss reserve account at lender institution​
Funds are not returned to 
MEDC/WHEDA upon
 loan pay off or maturity. They remain in
the loan loss reserve account at the lender institution to be recycled as loan loss
reserve for subsequent SSBCI-eligible loans
The Primary Lender can make claims of charged off loans from the CAP account for
shortfalls on collections. Recoveries must be re-deposited into the reserve account
 
 
 
undefined
 
COMMUNITY
REINVESTMENT FUND EXC
HANGE PLATFORM
 
HOW TO PARTICIPATE
 
Indicate interest in serving as a lender in the program, and WHEDA will provide an
onboarding questionnaire
Upon approval, each Lender will be onboarded to 
CRF’s
 web-based Exchange
platform, which will be utilized by participating lenders for the following:​
Inputting loan applications for WHEDA approval ​
Ongoing reporting and compliance required under the SSBCI program
Current Treasury guidance requires quarterly and annual reporting requirements
Repayment reporting
 
CALL TO ACTION
 
Contact 
SSBCI@wheda.com
 to begin the approval process.
Slide Note
Embed
Share

WHEDA, the Wisconsin Housing and Economic Development Authority, collaborates with various entities to provide low-cost financing programs aimed at stimulating the state's economy. Through initiatives like the Loan Participation Program (LPP), Collateral Support Program (CSP), and Capital Access Program (CAP), WHEDA offers support to small businesses by buying interests in loans, providing collateral support, and offering portfolio insurance. The LPP process involves loan sourcing, application for participation, verification, funding, repayment, and data submission for compliance. Terms of the LPP include loan originations, varying participation levels, interest rates, terms, and flexibility for the primary lender to repurchase. WHEDA's mission is to enhance residents' quality of life by facilitating affordable housing and business financing opportunities.


Uploaded on Apr 02, 2024 | 1 Views


Download Presentation

Please find below an Image/Link to download the presentation.

The content on the website is provided AS IS for your information and personal use only. It may not be sold, licensed, or shared on other websites without obtaining consent from the author. Download presentation by click this link. If you encounter any issues during the download, it is possible that the publisher has removed the file from their server.

E N D

Presentation Transcript


  1. STATE SMALL BUSINESS CREDIT INITIATIVE 2.0 WHEDA CDFI ROUNDTABLE

  2. AGENDA 1. 2. 3. 4. 5. 6. 7. Who is WHEDA? WHEDA SSBCI Products Application Process CDFI Compliance Requirements How to Participate Call to Action Q&A

  3. WHO IS WHEDA? WHEDA works closely with lenders, developers, local government, nonprofits, community groups, and others to implement its low-cost financing programs. Mission WHEDA s mission is to stimulate the state s economy and improve the quality of life for Wisconsin residents by providing affordable housing and business financing products. Vision We provide the tools to help people and communities realize their hopes and dreams.

  4. Overview of WHEDA-funded SSBCI Products Loan Participation Program (LPP) WHEDA will buy an interest in loans made by participant lenders to small businesses Collateral Support Program (CSP) WHEDA will make a collateral support contribution of up to 20% of the total, which will collateralize the Borrower s loan, enabling start-ups to help their businesses grow Capital Access Program (CAP) Program administered by WHEDA in collaboration with Milwaukee Economic Development Corporation (MEDC) that provides portfolio insurance in the form of a loan loss reserve fund to lenders that make small business loans

  5. LOAN PARTICIPATION PROGRAM (LPP)

  6. Loan Participation Program (LPP) HOW IT WORKS 1. CDFI sources the loan 2. Applies to WHEDA for participation with SSBCI funds 3. WHEDA verifies SSBCI eligibility 4. Loan Participation Agreement is signed 5. Loan is funded 6. CDFI remits principal repayments, quarterly 7. CDFI remits program data required for SSBCI compliance, quarterly

  7. Loan Participation Program (LPP) TERMS Primary Lender originates loan, WHEDA purchases up to 10% of loan WHEDA's participation may vary from time to time based on program liquidity targeted participation range is $25,000 - $200,000 Rates, fees, and terms are established by Primary Lender WHEDA participation will be at 0% interest to provide better DCR. WHEDA's maximum loan term is seven years WHEDA loan will be in first loss position, and Primary Lender will have first claim to all recoveries Primary Lender has option to repurchase participation sold to WHEDA at any time

  8. COLLATERAL SUPPORT PROGRAM (CSP)

  9. Collateral Support Program (CSP) HOW IT WORKS 1. CDFI sources the loan 2. Applies to WHEDA for collateral support with SSBCI funds 3. WHEDA verifies SSBCI eligibility 4. Primary Lender closes the loan 5. CSP funds are provided to Primary Lender to be held in a Lender held account until prepayment or maturity, at which point funds are returned to WHEDA 6. CDFI remits program data required for SSBCI compliance, quarterly

  10. Collateral Support Program (CSP) TERMS Primary Lender originates loan, WHEDA makes a collateral support contribution of up to 20% of total to collateralize Borrower's loan . WHEDA's maximum deposit is $75,000 Underwriting and servicing performed by Primary Lender, underwriting is shared with WHEDA for review and approval prior to commitment Funds will be held in an account at Primary Lender's institution while deployed Funds will be returned to WHEDA after initial term or upon repayment of loan. Maximum term is 7 years In the event of a loss of the lead lender's of program funds, the lead lender must liquidate all available collateralized assets before accessing the collateral reserve funded by WHEDA

  11. CAPITAL ACCESS PROGRAM (CAP)

  12. Capital Access Program (CAP) HOW IT WORKS 1. Program will be administered by WHEDA in collaboration with Milwaukee Economic Development Corporation (MEDC) 2. The Primary Lender applies to MEDC and submits a loan fee 3. MEDC applies to WHEDA for capital access funded by SSBCI 4. WHEDA verifies SSBCI eligibility 5. The Primary Lender completes a Participation Agreement with MEDC 6. Capital access funds are provided to MEDC to be placed in loan loss reserve account at Primary Lender institution 7. MEDC remits program data required for SSBCI compliance, quarterly

  13. Capital Access Program (CAP) TERMS Loan is underwritten by Primary Lender using their own terms SSBCI fund may be used to match between 3% and 7% depending on the loan size, or the combined total of the lender/borrower contribution Funds will be used to establish loan loss reserve account at lender institution Funds are not returned to MEDC/WHEDA upon loan pay off or maturity. They remain in the loan loss reserve account at the lender institution to be recycled as loan loss reserve for subsequent SSBCI-eligible loans The Primary Lender can make claims of charged off loans from the CAP account for shortfalls on collections. Recoveries must be re-deposited into the reserve account

  14. COMMUNITY REINVESTMENT FUND EXC HANGE PLATFORM

  15. HOW TO PARTICIPATE Indicate interest in serving as a lender in the program, and WHEDA will provide an onboarding questionnaire Upon approval, each Lender will be onboarded to CRF s web-based Exchange platform, which will be utilized by participating lenders for the following: Inputting loan applications for WHEDA approval Ongoing reporting and compliance required under the SSBCI program Current Treasury guidance requires quarterly and annual reporting requirements Repayment reporting

  16. CALL TO ACTION Contact SSBCI@wheda.com to begin the approval process.

Related


More Related Content

giItT1WQy@!-/#giItT1WQy@!-/#giItT1WQy@!-/#giItT1WQy@!-/#giItT1WQy@!-/#