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Objective: The Buffalo Economic Renaissance Corporation (BERC) has two missions: to strengthen Buffalo businesses and to strengthen our community.

The BERC is a fixed asset lender focusing on gap financing. In order to qualify for one of the special loan programs, projects must be in the city of Buffalo and unable to secure its total financing through private sector loans or equity. In addition, the project must result in one of the following:

• Creation or retention of jobs at which at least 51% are low/moderate income

• Elimination of slum and blight

• Provision of a necessary service to a low to moderate income neighborhood

The BERC designs and operates loan programs that invest in industrial and commercial projects which benefit the city of Buffalo by creating jobs and providing services throughout the Buffalo metropolitan area. The BERC enters into a lending partnership with private sector financial institutions to share the risk. BERC assistance reduces the collateral risk for the lending institution, however, owner equity is a required and necessary part of every project.

Compliance: The BERC loans must adhere to United States Housing and Urban Development regulations. The BERC has and will continue to make loans to minority-owned businesses.

BEDC Lending: Gap financing, available funds: $2,500 - $300,000, fixed-asset

Specifics financing: equipment, machinery, real estate and/or leasehold improvements, limited working capital.

Ineligible activities: Refinancing of existing debt, financing of movable machinery and equipment, and rolling stock.

Fees: A non-refundable application fee from $275.00 to $300.00 payable at time of application.

A commitment fee of 1% of the loan amount, payable upon the issuance of a Commitment Letter by the BERC.

A closing and legal fee of 1% of the loan amount, payable at the time of loan closing.

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Specific programs: • BERC Permanent Working Capital Loan Program (as part of a larger

project)

• BERC High Tech/Medical Loan Program

• BERC Neighborhood Micro Enterprise Loan Program • SBA Micro Loan Program

• BERC Business Loan Program

• Construction Financing Program (Float Loan) • EDA Title IX Revolving Loan Fund (RLF) • Minority Contractor Loan Program (MCLP)

Program: BERC Permanent Working Capital Loan Program

Description: Provides permanent working capital loans in conjunction with a business expansion project to address the operating capital needs of a business when other funding sources are insufficient or not available. Eligible uses are: the purchase of fixed assets and for operating capital This loan program is a gap financing tool and must be in conjunction with private financing, other public (RDC) and equity. This program will assist companies who are expanding operations and who are unable to obtain sufficient working capital from other sources to meet their immediate needs, i.e. the bank and the County IDA. Percentage of participating will be determined based on the gap in funding sources, but in no event shall exceed 50% of the operating capital needs of the business up to a maximum of $150,000.

Eligibility: Businesses that are expanding operation and are located in or are relocating to the City of Buffalo and that can demonstrate that there exists a funding gap which is not obtainable from any other source. Must have been in business for at least one year.

Ineligible uses: Refinancing of existing debt or equity, and the purchase of rolling stock.

Ineligible recipients: Individual/business that has outstanding federal and/or state tax lien(s).

Individual/business that has defaulted on a BERC (f/k/a Buffalo Enterprise Development Corporation) loan.

Individual/business with an unfavorable credit history. Individual/business that has outstanding judgements.

Use of Funds: Purchase of fixed assets and for operating capital

Loan Limit: Maximum: $150,000. If the project is funded with CDBG funds, the project must meet a HUD National Objective (51% low mod job creation/retention, service to a 51% low mod area, or the elimination of slums and blight).

Loan Term: Co-terminus with private financing, or 5 to 7 years, whichever is less.

Interest Rate: Prime, as published in the Wall Street Journal, Midwest Edition on the date of Loan Committee approval, +1%.

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Conditions: Must be in conjunction with private financing of not less than 50% of the total eligible project cost. BERC can accept various lien positions.

Collateral: Loans will be collateralized by the assets of the business, personal guarantees and other collateral deemed necessary by BERC.

Program: BERC High Tech/Medical Loan Program

Provides fixed-rate loans to encourage high technology and medical-oriented companies to expand in or relocate to the City of Buffalo Empire Zone (EZ). Eligible uses are: the acquisition of fixed assets, e.g. land and building, renovations, leasehold improvements, the purchase of furniture, fixtures and equipment, and permanent working capital. Working capital loans may only be considered when other funding sources are not available or are insufficient to address the working capital needs of the business. This loan program is a gap financing tool and must be in conjunction with private financing and equity.

Description: This program is to encourage the development and expansion of high tech and medical-oriented companies in the City of Buffalo EZ, with specific emphasis on the High St. Medical Corridor. The company must demonstrate a need to expand and create new employment opportunities primarily for residents of the City of Buffalo. BERC participation will be determined based on the gap in funding sources, but in no event shall exceed 50% of the total eligible project costs up to a maximum of $300,000.

Eligibility: The program will give preference to, but not be limited to, any “high tech or

medically oriented” company (“targeted business”) that is expanding operations

in or relocating to the EZ. Priority will be given to projects in the High St. Medical Corridor. Must have been in business for at least one year.

Use of Funds: Any administrative office, retail, wholesale, commercial or professional business located within the City of Buffalo. Includes acquisition, construction or renovation of real property and acquisition of furniture, fixtures and equipment.

Ineligible: Refinancing of existing debt, financing movable machinery and equipment, rolling stock and working capital.

Loan Limit: Maximum: $300,000. If CDBG funds are used to fund this activity and it involves construction/renovation, the project must meet a HUD National Objective (51% low mod job creation/retention, provide a service to a 51% low mod area, or the elimination of slums and blight), and must adhere to Davis Bacon and Section 3 Legislation.

Loan Term: Co-terminus with private financing or 15 years, whichever is less. The term will be based on the useful life of the asset(s) being financed.

Interest Rate: Prime rate, as published in the Wall Street Journal, Midwest Edition, on the date of Loan Committee approval +1%.

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Flexible, “last resort” loans to encourage neighborhood businesses that are located in the City of Buffalo to expand operations. Eligible uses are renovation, construction, the purchase of furniture, fixtures and equipment and working capital. This loan program is structured to fill the gap in funding not available from any other source, e.g., a lending institution and/or equity. BERC can finance ninety percent (90%) of a project requiring not less than $2,500 or more than $25,000.

Description: The program will assist and encourage neighborhood businesses to expand operations by providing “last resort” financing to companies who are unable to secure financing from conventional sources or fund the project out of internal working capital. BERC’s participation will be determined based on the gap in funding sources. As a direct result of the BERC financing, new permanent job opportunities must be created of which 51% will be held by low to moderate income persons, provide a service or product that will benefit a low to moderate income area, or eliminate slums and blight, to qualify. If the activity is funded with CDBG funds and involves construction/renovation, Davis Bacon and Section 3 Legislation will be applicable, and also must meet a HUD National Objective (51% low/mod job creation or retention, service to a 51% low mod area or elimination of slums and blight).

Eligibility: Must be a neighborhood business located in the City of Buffalo.

Ineligible: Refinancing of existing debt or equity and the purchase of rolling stock.

Loan Limit: Not less than $2,500 and not greater than $25,000.

Loan Term: The term of the loan shall range from 3 to 15 years and shall be based on the nature of the funding provided, e.g., fixed asset financing (5 to 15 years) or a working capital credit facility (3 years).

Interest Rate: Prime rate, as published in the Wall Street Journal, Midwest Edition, +1%.

Program: BERC Business Loan Program

Provides fixed-rate loans for renovation or the acquisition of real estate, the purchase of furniture fixtures and equipment, and for permanent working capital in conjunction with private financing to businesses that are located in the city limits of Buffalo, New York. Working capital loans will only be considered when other funding sources are not available or are insufficient to address the working capital needs of the business. This loan program is a gap-financing tool and must be in conjunction with private financing and equity.

Description: The program assists Buffalo industrial and commercial firms to expand and create employment opportunities for low to moderate income citizens.

Eligibility: All firms engaged in manufacturing, warehousing, distribution, and research and development, and administrative office, retail, wholesale, commercial or professional business located in the City of Buffalo for at least one year. Priority will be given to applicants who demonstrate an ability to substantially benefit a

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target unemployed persons. The project must result in the creation of new permanent jobs of which 51% will be held by low to moderate income persons, provide a service or product that will benefit a low to moderate income area, or eliminate slums and blight, to qualify. If CDBG funds are used to fund this activity, and construction/renovation is involved, Davis Bacon and Section 3 Legislation will be applicable.

Use of Funds: Acquisition and/or renovation of real estate, the purchase of furniture, fixtures and, equipment, and for permanent working capital in conjunction with private financing.

Ineligible: Refinancing of existing debt or equity, and the purchase of rolling stock.

Loan Limit: The BERC can finance 50% of total eligible project cost. Maximum: loan amount is $300,000

Loan Term: Co-terminus with private financing or 15 years, whichever is less. The term will be based on the useful life of the asset(s) being financed.

Interest Rate: Prime rate, as published in the Wall Street Journal, Midwest Edition on the date of Loan Committee approval, +1%

Program: SBA Micro Loan Program

Description: Provides loans to business owners and tenants. This loan program can also finance start-up businesses.

Eligibility: All business and property owners located in the city of Buffalo having annual sales of less than $1million are eligible, providing they are not part of a chain or franchise with more than three outlets. Must retain or create new jobs.

Use of Funds: Purchase furniture and equipment for working capital.

Ineligible Activities: Refinancing of existing debt, improvements or acquisition of real estate. Loan Limit: Minimum loan amount is $2,500 and maximum is $35,000.

Loan Term: Up to 5 years.

Interest Rate: 6.78%

Program: Construction Financing Program (Float Loan)

Description: BEDC encourages growth and expansion of local industrial and commercial facilities through the provision of low interest, short-term loans to companies and developers seeking construction and financing.

Eligibility: Industrial and commercial developers and businesses are eligible. Preference will be given to applicants who demonstrate the ability to substantially benefit a target group of low and moderate income persons. Construction financing must be

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secured by a mortgage and an unconditional, irrevocable letter of credit from a private lending institution.

Use of Funds: Land and property acquisition, development or rehabilitation of land, buildings and facilities, short-term working capital costs including labor, supplies and related soft costs.

Ineligible Activities: Movable machinery and equipment acquisition, venture capitalization,

refinancing of debt.

Loan Limit: Maximum: based on availability of funds.

Interest Rate: Fixed rate usually below market rate and based on borrower ability to pay.

Program: Construction Financing Program (Float Loan)

Description: The Buffalo Economic Renaissance Corporation (BERC) encourages the growth and expansion of local industrial and commercial facilities through the provision of short-term loans to companies and developers seeking construction (interim) financing.

Financing

Criteria: Secured construction financing loans will be provided at a fixed rate, and are typically below prime market rate. The source of funds for this program is composed of idle funds available from the City’s annual Community Development Block Grant entitlement. This financing vehicle will normally not exceed the construction period. The funds may be called by BERC, depending on the cash needs of the City’s Block Grant program activities. If the float loan funds will be used for construction/renovation, the project must meet one of the HUD National Objectives (51% low mod job creation/retention, service to a low mod area, or the elimination of slums and blight) and Davis Bacon and Section 3 Legislation will be applicable.

Eligibility: Industrial and commercial developers and businesses are eligible. Preference will be given to applicants who demonstrate the ability to substantially benefit a target group of low and moderate income persons.

Use of Funds: Land and building acquisition, development or rehabilitation of land, buildings and facilities, or short-term working capital costs including labor, supplies and related soft costs.

Ineligible Activities: Purchase of rolling stock, venture capitalization, or refinancing of an existing

indebtedness or equity.

Loan Limit: The maximum available amount would be determined by the demonstrated need of the project and availability of idle CDBG funds.

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Interest Rate: Based on the 26 week Treasury Bill rate, as published in the Wall Street Journal,

Midwest Edition, on the date of Common Council authorization, +1%, with a

floor of 4%.

Program: EDA Title IX Revolving Loan Fund (RLF)

Description: Provides fixed-rate financing for fixed assets or working capital loans to companies in expansion mode. The BERC can finance up to 33% of total project cost, in conjunction with private financing and equity.

Eligibility: All firms engaged in industrial or commercial activities, including light manufacturing and service industries. The company must be located in or moving into one of the targeted areas. The project must result in the creation of new, permanent jobs, or the retention of existing jobs, with primary benefit to low/mod income people. If the funds will be used for construction/renovation, Davis Bacon Legislation will be applicable. Must be located in or moving into a targeted area. Must be in conjunction with private financing of not less than 66% of the total eligible project cost.

Use of Funds:

Ineligible Activities: Refinancing of existing debt or equity, subsidize interest on existing loans,

purchase or finance equity in private business or the purchase of rolling stock.

Loan Term: Co-terminus with private financing or fifteen (15) years, whichever is less. The term will be based on the useful life of the asset(s) being financed.

Interest Rate: Prime rate, as published in the Wall Street Journal, Midwest Edition on the date of Loan Committee approval +1%, with a floor of 4%

Program: Minority Contractor Loan Program (MCLP)

Description: The MCLP increases employment opportunities for minority construction firms, provides a buffer of overhead costs of contractual obligations, enhances the internal management proficiency, establishes business relationships with financial institutions. These objectives are accomplished by providing working capital loans. This loan program is funded with miscellaneous revenues because loans to contractors do not, based on HUD’s standards, result in the creation of permanent full-time jobs.

Eligibility: Construction firms that have been in business for at least one year, whose base of operations is located in the City of Buffalo or in Erie County, that are owned and controlled by one or more members of the following minority groups (based on the minority definition utilized by the City of Buffalo and the Department of Housing and Urban Development): African American, Hispanics, Asian or Pacific Islanders, American Indian, Alaskan Native. Non-minority women are not eligible.

Use of Funds: Short-term working capital for labor, supplies and related software, bid deposits, construction projects both public and private through Erie and surrounding counties.

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Ineligible Activities: Land and building acquisition, equipment and machinery acquisition, dollar for

dollar refinancing of an existing indebtedness or equity, purchase of rolling stock.

Loan Term: Based on the completion schedule of the specific contract(s) BERC is lending against, or conterminous with the term of the senior lenders’ line availability, or one (1) year, whichever is less.

Interest Rate: Prime rate, as published in the Wall Street Journal, Midwest Edition on the date of Loan Committee approval +1%