How Do I Sign New Mexico Banking Presentation

Industry sign banking new mexico ppt free

hi good morning this is Johanna Nelson and I'm on the finance team for the state of New Mexico's Economic Development Department and we have our whole team gathered here today Juan Torres the finance team director as well as crystal clear water finance development specialists and we're really excited to have you here today to introduce to you our newest program that we're really excited about called the New Mexico credit enhancement program so thanks for your time hopefully this will be valuable to you and you can take it back to your respective organizations and communities and and use this as a good tool to help strengthen the businesses in your area so before we get started I just wanted to point out a few things this webinar is a part of our New Mexico Economic Development Department finance team webinar series we do these every other month and address topics that that are relevant to our programs and our educational and nature and if you ever miss one they are recorded and preserved on our YouTube page so if you do have to jump off for any reason today we will send a link out to our YouTube page and we'll also send out this PowerPoint presentation to all registered participants so that YouTube page if you haven't gone to it just Google YouTube New Mexico Economic Development Department and it has some helpful resources from webinars that we've addressed in the past and we will be taking questions so feel free to type your questions in as we go in and your GoToWebinar screen there should be a little gray box to the bottom right of your screen so feel free to type those questions in and we'll do our best to get those answered by the end of the presentation we did a lot about in 90 mm it for this presentation but I don't think it'll it'll take too long but we will open up the presentation for questions at the end so before we get started crystal clear water was going to give you a little bit of background about our team and what we do thank you very much for that Joanna hi everyone as Joanna said I'm crystal clear water of the finance development team here at the enemy DD and our goal here is to create and retain jobs in New Mexico we utilize a lot of tools to help businesses expand relocate start up or prevent shutdown and we do that by providing in-depth consultations for businesses and startup companies we can provide analyses of financial statements we can collaborate to find solutions with resource partners like the manufacturing extension partnership and the New Mexico Small Business Development Center along with federal and state agencies we can help find funding through federal and state programs offered by the USDA NMFA SBA and others develop financial packaging combinations that may include debt or equity financing and access to capital through various limping institutions or programs and we can even perform incentive and Tax Credit analyses to identify cost savings opportunities for businesses so that's some things to keep in mind next slide please so some of the programs we offer here at the NM e DD include the local economic development act program or as many people know it leeta which allows us to assist businesses who manufacture or are economic based companies this is a gap-filling program that helps companies relocate to or expand in new mexico by reimbursing a portion of the cost incurred for land building or infrastructure collaboration occurs between the state and local governing to get Leda funding to the company we also have the rural efficient business program which helps small business owners learn if their operation is energy and financially efficient the program promotes cost savings through on-site energy assessments provided by the energy minerals and natural resources department our team can also provide a financial tune-up which could lead to additional cost savings the credit enhancement program is what we're going to be talking about today that's a gap-filling solution to companies that want to use a loan to make a business-related purchase obtain working capital paper franchise fees and other stuff Juan and Johanna are going to share more on that program later in this presentation we're conducting this webinar today as part of the New Mexico funded program which is managed by Joanna Nelson fund that brings together local state federal and other funding entities to find financial solutions for complex community or governmental projects this is very very helpful when a local community is working on a large-scale project that is multifaceted and has many needs such as maybe they're trying to build sidewalks and put in landscaping and they need access to water and other things that all may kind of be different and need different funding solutions so that brings all the different agencies to the table all those different entities to the table to find those solutions the new market tax credits program is something we support and collaboration with the New Mexico Finance Authority or an MFA we recently had a webinar on this program so be sure to check that out on our website go Mmmbop is the new market tax credits program was established to provide greater access to financing for new expanding or relocating businesses and underserved areas across the country projects eligible for funding must be located within qualified census tracts that are generally located in highly distressed area these are often non-metropolitan areas that meet specific requirements pertaining to impoverishment levels income and unemployment the eb-5 foreign investor program allows eligible entrepreneurs to apply for a green card if they create or preserve ten full-time qualified jobs in the US and making substantial capital investment into a commercial enterprise within the US as the name implies we do work with an eb-5 regional center designated by the US Citizenship and Immigration Services to facilitate that program with that I'd like to hand it over to Juan to give us a little background and tell us how the New Mexico credit enhancement program got started Thank You crystal and I guess I should point out that we we've got to update that slide because Opportunity Zones were just uploaded to the Department of Treasury so we're hoping to hear very soon about that program and try to help communities and companies figure out how to utilize the opportunity's own program but good morning everyone and thank you very much for inviting me here Joanna talk a little bit about where the money came from for this program so the funds that we're using to fund this credit enhancement program initially started through the state small business credit initiative which was a an offshoot of the small business Jobs Act of 2010 we had a program through our partner the New Mexico Finance Authority they had set up a collateral support program and we managed to run run through that over a number of years towards the end of the of the of the period of time when the PCI program was coming to an end we were directed by the secretary at the time to come up with more innovative creative ways that we can utilize these funds and so in the funds that we did receive were thirteen point one million dollars so as a result of that directive we created the catalyst fund it's a five million dollar fund the fund that will generate over forty million dollars of leverage and is currently almost fully subscribed so it's very popular and that information can be found on our website we still have a few collateral support program loans that are in repayment and we started the small the the Small Business Innovation research grant program to assist technology companies in they're trying to access credit as they move from R&D to fully functioning companies and again there's more information about that on our website today joanna is going to tell us a little bit about the president Hanson program and that is an attempt to provide a streamlined solution to filling a gap in a project but again these are all federal dollars that we have repurposed there's no state dollars associated with this so we are able to kind of be a little bit more creative and expansive in the activities that we engage in we invite your feedback and questions regarding the program or feedback if you're involved and how that's working we've got one loan closed and we have a couple several in the pipeline so I encourage you to give us whatever feedback you might have after this program and how we might be able to make this an even more effective program so with that I turn it back over to Joanna for the meat and potatoes of this presentation thanks Juan um so piggybacking off of what Juan said about the monies that the state of New Mexico received we received 13 point 1 million dollars at the beginning of this federal program it closed the program closed last year and we were presented with the idea that what are we going to do with with this money how can we create a valuable program so what we did was we surveyed lenders in the state of New Mexico to see what their feedback and what their ideas were in the idea of business the business lending landscape what challenges did they see what issues did they have with programs that were in existence so we could create like one said an effective program to have the biggest economic impact in the state so overwhelmingly we heard from New Mexico lenders that they weren't able to make deals and close the deals that they wanted to for businesses because there was a lack of creditworthiness and a lack of collateral that existed and I thought that this quote was was pretty telling that we pulled out from the survey you know we we do here a lot on a day to day basis working in economic development it's often said that businesses don't have access to cash they don't have access to capital but one of the lenders pointed out you know it's not an issue of access to capital we have plenty of capital to lend out it's finding those bankable projects finding those projects that have enough collateral and enough credit to to close the deal so that's where we felt like this program could be effective and help support projects and businesses that are struggling to cross that hurdle of creditworthiness and and collateral so that's where we decided to to go into so to give you an overview of the program it's been mentioned already before but this is a gap Assistance Program in the way that businesses overwhelmingly and this is considering startup and expanding businesses struggle oftentimes with finding a hundred percent collateral to be sufficient for a bank to make a business loan so the idea behind the CEP is that we can purchase a certificate of deposit a CD in a lending institution to cover that collateral shortfall and we can participate a certain percentage point and we'll get it into that but we can all hear this we can participate up to fifty percent of the loan principal value depending on the qualifying criteria that the business meet so this essentially could be a really good tool to address the problems that are in existence in New Mexico closing those deals that otherwise couldn't be closed and the point to make as well here is that this program doesn't necessarily help the projects that are just unbanked that just need help in the collateral area so that's something to consider - it's not addressing business planning deficiencies or management deficiencies this is specifically focusing on collateral so the idea behind SSB CI as a federal program was innocence created around the time that economies were reeling from the economic recession and the mission was to address the tight reins that the lenders had put on their their lending practices and to help them become more liberal with their lending so that's that's the whole idea behind the original federal program we decided to carry on that mission in addressing maybe deficiencies or tighter lending practices to reach what what are called underserved economic markets and we have come up with a number of targeted markets that we want this program to specifically help and by bringing these to light we're showing that that we're putting more weight on these variables if a borrower a you know exhibit these these traits so to support those underserved markets where we are including the following groups the business owner is a minority owner which basically means non white their business center is a woman a veteran the business is located in a rural area which we're using the definition of under fifty thousand in population and the area that the business is located in is a economically depressed area it has a low to moderate income in the area so those are the demographic things that we're looking at and then as a department we do have direction to focus on specific industries so we are looking we are continuing to place emphasis on those industries which include manufacturing green businesses economic base businesses which generate at least 50% of their income from out of state so we're putting more weight on those variables and then as well if the project does create jobs that's extra incentive and extra weight so these are I our ideal traits and characteristics of the project however oh sorry why is limited very quickly address the question of the groups and the locations what informed that focus specifically was that as we looked at surveys and we looked at lots of data points those groups and the locations exhibited a number of factors which tended to limit access to credit for a variety of reasons so there are a number of studies that were done that women business owners get less loans or loans for less amounts as veterans as minorities as well that business is located in geographic location that a rural have a harder time of getting a loan so I just wanted to point out that and that was a lot of research that was done by joanna that these targeted groups and these targeted areas have a debt data behind them to say there there are there are hurdles accessing capital in those areas of for those groups and that's what this is trying to address it exactly thanks for putting that up and then I'd like to also mention that these by no means are exclusive meaning that if a project didn't hit on any of these traits it doesn't mean that the project is ineligible for the program these qualifiers and these guidelines are very loose but these guidelines help us determine our participation in the loan deal so I mentioned that our max participation is fifty percent of the principal so ideally the the project would hit on many of these factors to get up to that fifty percent that that maximum participation on our end if a project didn't hit on you know very few of these are hardly any they could still enroll in the program and we could participate it would just be at a lower percentage point of the principal so I want to point that out this is a a guideline of considerations as well as how we determine how much we can participate in the loan deal so as you can see this is very this is a very loose interpretation of our guidelines but just wanted to put this up here for you to see you know if it's a target and Industry our maximum participation is two hundred fifty thousand we are putting a cap at at the low end of our participation around the twenty to twenty-five thousand so there is a minimum that we can participate in and then you can get an idea of somewhat where that percentage participation is based and it's also important to point out that this program is created like a revolving loan fund meaning that for it to be successful we need to get arm our monies out of the deals as quickly as possible in order to be able to participate in as many projects as we can so there's incentive and there's more weight on being able to release our funds from each respective project under a maximum length of time being three years so this is ideal for projects that have shorter life spans like a line of credit or an equipment loan you know that are under two years however I'd like to point out that what we've seen the thing - I should say the lenders - is that so have a longer note let's say you know we used the last one that we did as an example it was a seven-year note however the borrower will have paid down our participating amount by two years so even thoug the loan will be in effect for seven years we can have our funds released within two years so the bank is okay with that as well as us to get an idea of the timeline in the process we did create this flow chart and hopefully you can read it and we do have this on document form so we can send this out we want it to be really clear about how long our process is and the steps that are involved in it because what we also found out from our survey and our experience is that a lot of lenders and oftentimes business owners have a negative perception of government-run guarantee and in lending programs because they often have perceptions that they're cumbersome or they they're they take too long they're too complex so we really wanted to make improvements on our end and make every effort to work with the lender and the borrower to have a speedy yet a speedy efficient process so to lay it all out there I think it's a good idea to understand the process at hand the the first important step is that a lender has to enroll in the program and that is just to share we as a state entity as a government entity have to have that lender registered as a what's called a vendor in our in our world and so we need certain information like a w9 we need the ACH routing and account information so all of that information from a lender has to be collected on the something and then we send it through our our flow of process on our end so that I can take around 30 days and that's the approximate sometimes it can be shorter but we want to get that done out of and out of the way as soon as possible so it's it's advocated and suggested that interested lenders enroll in the program early maybe even before they have a project in order to shorten this this this step so and I should point out too that banks are able to enroll as well as CDFIs and we have had several CDFIs enroll in the program and they're just filling out information about their elected lending institution that they use that we would deposit the CD in but that's that's first and foremost the the first step that we have to address the second is that the lender would submit an application that we're calling the enrollment form into the program so this is the actual application that's addressing the the loan amount the collateral that is on the table and other defining information about the project as well with that application we're also getting in from collecting information that's basic to the lenders analysis that Dave use an example would be the business plan or the projections or the financials because I'll bring it up here is that we will do an analysis on the project to determine its viability and the feasibility but we're putting a lot of emphasis and a lot of weight on the analysis that the bank is doing because we're basically going back to them and saying if this is an okay deal for you guys and it's just for the exception of the collateral where we're depending a lot on that that process however we still do we'll do the analysis and on our n but it's it's not as Extreme as the lenders credit analysis so we will get that information in and I want to point out to it that the application is very simple with two pages and it's basically like I mentioned summarizing the defining info and data from the project so after we receive that information our finance team does the analysis and then we give our summary to our CEP review group and and when we created this we said board but I think it's even more informal it's not an official board it's a group of people that we've gathered together that have experience in lending in New Mexico and various perspectives and they reviewed the documents and they give us their final approval or non support within five days so that decision that we can participate in the deal is made essentially within five days so we get back to the lender and give that decision so step four once the the lending institution has the yay earn a green light a red light they then can be and that underwriting process and once the loan is is finalized and we have those documents then we the Department get with the lending institution and we sign a formal agreement between us and the bank and basically it's it's identifying the terms of the loan the amount of our participation it's identifying you know the barriers I didn't find all of the legal aspects it also goes over what happens in case of a loan default it's ideally identifying all of the the ins and outs of the legalities of the project so rat side and then our money is wired to the bank and we have set up a reporting requirement that the lender reports to us on a semi-annual basis on the principle amount and the current status of the loan and then we're also requesting annually to have a business report to enemy DD about particular economic impact data that we're interested in being mainly job creation and private investment capital effect has been gained or lost so this we're excited to about the potential to be able to track that the health of some businesses so within that those steps that that's a rough overview giving you an idea of the steps to play if you know if the groups a review group in the department give and improve 'el to support a project that approval could last up to 90 days that's good for 90 days because you know something could happen on the lender side that the the project takes longer um we've also been asked as well that we had a situation where the Bank project needed to move faster than we were able to move so what they did was get a an oral confirmation for us that we could participate they went ahead and and funded the loan and then we came in and we signed all of the documents on the tail end of that so there's a lot of flexibility in this process that that we are more than happy to negotiate and and figure out and talk to the bank to figure out how best we can be efficient and meet the timelines and schedule needs of the project and in the lending institution so to recap here are the forms that are required for the the program the the most being and it's not even that much but for the lender to enroll a simple w-9 form there is an ACH form that they fill out with their routing and account information and then it's also necessary on our end to have a letterhead letter or a letterhead document that that just says by the signer the repeating the account and the routing information and then there is the application to sign between the borrower and the lender then there's that legal document the collateral deposit agreement that's signed by the lender in our department and then in the case of default there is a submission form that they would submit and then there's also the economic impact report due on the loan anniversary date to our department and all of these forms are available on our website that you can use this hyperlink to go to and and if you're you're just looking on our website if you go to the finance team development landing page on the right hand side you'll see credit enhancement program and you can go there and access all of the forms it might seem like a lot but they're very very simple forms and easy to follow so that very much is a summary of the program and then I'll look at questions to see and then I might am I missing anything crystal and one we kind of flew through that I think you got it covered very well yeah okay and we do have some questions so I'll read them out loud is there an information brochure that we can provide to the lending institution to encourage signing up in advance so we are in the process of working with our marketing firm or not our marketing firm but our marketing division to get some more polished collateral to be able to hand it out to hand out within your communities we have a simple one-page document that that I actually all attached that to our PowerPoint that we'll send out that we've been using as our promotional informative piece and it's just a one page document kind of like an FAQ that summarizes the program so we do have that more more polished material to come but I'd like to just use that question as an opportunity to say that our promotion and marketing of the program is our biggest next step and that's why you know one of the reasons why we're having this webinar is we have to get the word out about this program and essentially it's coming down to the lenders being aware of the program because as you know within the lending world there's quite a bit of turnover and programs common programs go so we need help getting the word out to them for them to enroll in the program so if you are an economic development organization or you represent a government easy operation we need help promoting this program to whatever lending connections that that you have and it's also a chance to say that we have had inquiries from businesses directly that have heard about the program Kanaan is perfectly fine however most of the the discussion ends with will have your your lender contact us because as I mentioned earlier we aren't really getting involved on the approval at the front end of the project if that makes sense so we are needing to get into the discussion after the lender has vetted the project somewhat and analyzed the project and and so our valuable discussions are coming directly from talking to the lender more so than than the business if that makes sense so helping us connect with the lenders is a fantastic way that to help connect us to the project and okay so we just along those lines we will be I think we've been invited to make a presentation at the New Mexico in Mexico Bankers Association meeting June 7th through the 8th at Sandia Resort so we will be there so we have that as our target period for having some very cool marketing materials done by them so June 7th through 8th at the New Mexico Bankers Association meeting and I think we've also been invited to the small business development centers quarterly leadership meeting and we will be getting the word out there so we watch for our presentations at those two events right and that that kind of leads into the next question Savannah had a question about how are you sharing this program with potential lenders how can we help get the word out and in one just hit on it the independent Bankers Association the Small Business Development Center we have talked to that the SBA as well so slowly but surely we are connecting with particular groups that this would be of interest to and we've done our fair share of cold calling banks that are approved lenders from USDA and SBA programs and that being said you know you can meet with one person one lender or even a few but it might not infiltrate the the entire banking institution so your help as I mentioned to be helping us connect with the winders and in your areas and especially this this program has been really successful if you look on a national scale helping those independent banks so the smaller community banks the CFI this program can be really valuable to them so we had a question from Michael at the SBA how many lenders are currently signed up for the program right now we have several applications in the pipeline we've which means we've received their applications and we've submitted them to our Department of Finance administration and so we have technically three organizations that are signed up and then we have several in the pipeline so very small we're just starting out and and we'd like to enroll more obviously so and then the next question is in line with that as well is there a list of lenders who have already joined the program we haven't compiled that yet Debbie but we will have a list of participating lenders and that'll be available on our website and it'll be information that we're able to disseminate because that's one of the advantages to the lenders is that they'll be identified as participants and borrowers and interesting entrepreneurs that are our choice about the program can see that list of identified windows that they can work with pick from if they're interested in utilizing the program so we'll have that available and I think that's pretty much the those are the questions if you have a question feel free to type it in do you guys have any closing remarks one and crystal I would just say that I appreciate everybody's time and attention I would you know personally I think that the focus on veterans and women's businesses are key especially with the veterans actually with a woman veteran because often we hear about products we hear a lot of rhetoric about helping veterans and this is actually a program that is very simple straightforward and if you know a veteran borrower who's looking to do something could really help on the collateral side so I would I would just kind of emphasize that just one of the things you want to fall of her work she did to develop and stand up this program this is literally just kind of the baby steps she mentioned we're putting a lot more things on our website I think by the middle of summer we should have this thing rolling well and have a very nice robust section of our website that addresses enrollment as well as forms and frequently asked questions so look for this again this is just the early stages we've got one closed a couple more that may be closing soon interest is starting to peak and pick up and so we are very encouraged by the response and thank you very much yes and just to point out some upcoming events that we have in our art team in our department we will have a funded webinar on May 23rd that we'll be addressing Department of Transportation funding programs so you can register for that that's free and then if you are located in the southwest region of the state in the dimming area we're going to have our next rural efficient business program May 30 ish and not open to any businesses and in the region as well as agricultural producers that are interested in reducing their energy consumption and it'll be a resource fair of types that they can connect with utility providers and engineers and sign up for a free energy assessment so they can go to their place of business and and have a report showing exactly where they're losing energy that's coming up May 30th and dimming that's a free workshop and then our funded meeting is coming up June fish so you can apply online that'll be in Albuquerque at the mid region Council of Governments and then her next finance team webinar will be sometime in June and we will be talking about how communities can register for our sign up and be a part of the local growth are the the low guard Local Option receipt tax program that the local expenditure and and the local program of hourly our state lita dollars so that's exciting and not will be unrolling in June so again thank you so much for your participation we will send this presentation out to you today and please get back with us with any feedback any follow-up questions any ideas that that in ways that you can help us promote that program and we look forward to having an opportunity to work with you on some exciting deals in your area so thanks so much take care