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Bidders Conference: RFP for Grant to Nonprofit Lenders, March 13, 2017 OEDIT Staff ◆ ◆ Jeff Kraft, Director of Business Funding and Incentives Frank Tamayo, Governor’s Office Procurement and Contracting ◆ Rosy McDonough, Director Minority Business Office ◆ Virginia Davis, Coordinator Business Funding and Incentives Rationale for RFP ◆ ◆ ◆ Start Ups and small businesses are responsible for a large percentage of new jobs. Federal Regulations and other factors have made it harder for Banks to make loans to small, start up businesses Start up presence in the economy is down 50% over the last 40 years There are market failures or gaps which restrict capital to small businesses (regulations, information asymmetries, industry structure) ◆ Rural Colorado has unique challenges in accessing capital ◆ Desire to leverage, existing non-profit lenders’ platforms Funding Amount Available ◆ At least $1.6M (Potential for more) Additional funding contingent on 2017/18 budget ~5% ($80,000) for admin costs and rest for loans ◆ Grant versus Loans (RFP written as a grant but need EDC approval) ◆ Targeting 1 to 3 awardees ◆ Potential need to get funds paid by June 30, 2017 Key Dates ◆ ◆ RFP published March 1, 2017 Informational Meeting for Potential Bidders @ OEDIT on March 13, 2017 from 9am to 11am ◆ Written Inquiry Deadline March 20, 2017 (Frank Tamayo) ◆ RFP Proposal Submission Deadline March 31, 2017 (Frank Tamayo) ◆ Evaluation Committee Meeting with Potential Required In Person Presentation 9am to 4pm April 7, 2017 ◆ Economic Development Commission Meeting April 20, 2017 ◆ Intent to award notice week of April 24, 2017 Logistics of Responding ◆ ◆ Send RFP Responses to Frank Tamayo, Procurement and Contract Service, [email protected] The RFP for OEDIT's Grant Opportunity is on the Colorado Procurement Web Site 1) See link https://codpavss.hostams.com/webapp/PRDVSS1X1/AltSelfService 2) Then hit "public access" button on the left side of the page 3)Then search on the following "EDAA 2017000214" to find the RFP ◆ Follow the directions in the RFP ◆ Submit on time. ◆ Tips from Frank Tamayo Key Evaluation Criteria Criteria Organizational capacity to administer the program Market failure or gap addressed by the program Rural and state-wide lending Leverage additional new capital for Colorado Alignment with OEDIT strategies and programs Proposed number of FTE jobs created or retained Criteria Weight 20% 20% 20% 20% 10% 10% Organizational Capacity (20%) ◆ ◆ ◆ ◆ ◆ Organization’s existing loan programs history, success, default rates Readiness and ability to begin deploying funds quickly upon receiving grant OEDIT is looking for entities who can plug this capital into an existing program with in place personnel, technical expertise and systems to run a loan program. Applicant financial strength. Will applicant exist to revolve the funds indefinitely once the initial grant is committed? Market Failure/Gap Addressed (20%) ◆ ◆ ◆ ◆ How is your program innovative? Demonstrate and explain market failure or market gap that will be addressed by this program that is not currently being addressed by the private sector or other non-profit government programs. Identify and quantify the demand for the program from credit worthy borrowers (existing programs show need for more capital than is currently or likely to be available) One possible example: small loans for start up businesses based on applicant character with payback from pro-formas and limited collateral Rural and State-Wide Lending (20%) • Demonstrated track record to provide state-wide lending including in rural areas • Willingness to commit to specific metrics for rural areas and main street businesses • Ability to provide loans to other underserved groups including minorities and veteran owned small businesses and start ups. Leverage New Capital (20%) • How will you leverage grant from OEDIT to bring in other new capital to Colorado from investors, philanthropic or federal sources. • Will this grant serve as matching funds to other capital providers? • How certain are these matching sources and are they dependent on this grant from OEDIT? • Explain in detail Alignment with OEDIT (10%) • Willingness and ability to align loan-making with OEDIT strategies and programs such as CDBG revolving loan funds, outdoor recreation and tourism offices, SBDC, Minority Business Office (MBO), Advanced Industries, Creative Districts and Creative Industries Programs, Historic Preservation Tax Credits. Blueprint 2.0 and others–-- Explain How • Example: Referring your loan applicants to Small Business Development Centers for packaging loan application and consulting • Align with OEDIT partners such as Department of Local Affairs, Colorado Energy Office, Federal Economic Development Administration • Agree to follow up on referrals from OEDIT and report back. Loans decisions to be made on underwriting criteria Proposed Job Impact (10 %) • A key goal is to help support existing and create new jobs. • How will loan program target small businesses with the ability to catalyze new job creation as opposed to small lifestyle businesses that only support a few employees and don’t have growth potential ? • Quantify forecast of loans made and the impact in supporting existing jobs and helping to create new jobs. • Report back to OEDIT on jobs supported and created regularly. Rules for Loans ◆ Max Loan Size $100,000 per recipient ◆ Max Interest Rate (prime +2% or similar) ◆ Max loan term 8 years ◆ Minimum % of loans to rural**** businesses: 40% ****Rural is defined as all state counties except 11 core Front Range Counties: Weld, Larimer, Boulder, Broomfield, Adams, Jefferson, Denver, Arapahoe, Douglas, El Paso, Pueblo Awardee Selection Process ◆ ◆ ◆ ◆ Review panel of several OEDIT Division Directors & Staff plus representatives from Department of Local Affairs (DOLA), Colorado Department of Agriculture, Colorado Housing Finance Authority (CHFA) Applications will be scored and discussed by Panel which will create recommendations for EDC. Applicants should be ready to make short presentations and answer questions in person on April 7, 2017 in front of Panel Final approval by Colorado Economic Development Commission (EDC) on April 20, 2017. Contracting Process ◆ Awards announced April 24 ◆ Finalize contracts by early June and disburse funds by June 30. ◆ Contract lasts for 5 years with possible extension. ◆ Regular detailed reporting requirements (first few loans individually) ◆ Customer agrees to make disburse funds quickly or return grants and to make periodic progress reports. ◆ Customers retain capital at the end of contract (pending EDC approval) ◆ Moral commitment to use funds for revolving loans post contract Questions ◆ ◆ Thank you for attending and assisting small businesses in Colorado Written questions to [email protected] by March 20, 2017