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USDA
Rural Economic Development Loan & Grant Program ("REDLG")
Business & Industry Loan Guarantee Program Financing
If you are seeking to develop a commercial real estate
project in a USDA qualified rural service area, then your project may
qualify for loan insurance under the Business & Industry Loan
Guarantee Program sub-title of the Rural
Economic Development Loan & Grant Program - or "REDLG"
the USDA administers. Known as the "B&I Program", this
title allows the federal government to provide a commercial lender,
mortgage banker or savings and loan association with loan insurance in the
event of foreclosure. This means the lender is insulated from loss,
but the borrower is not.
The typical arrangement is for a construction and
perm/mini-perm mortgage loan having a 70% LTV ratio the lender funds in
the primary market (established credit lines, private placement, conduit,
etc.), services and holds. The borrower has an initial application
that is screened through the local extension office where the project is
located and that means a complete due diligence documentation set is going
to end up being required to close escrow. This would include:
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The 5-part feasibility report
that is mandated under the REDLG program as part of the initial
screening process. |
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The capital funding proposal. |
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The project team profiles
(architecture, construction, development, engineering, feasibility,
insurance, management/operations, real estate and specialties). |
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Sponsor financial disclosure
package. |
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Project business plan,
marketing/media/advertising/sales plan, reporting plan and regulatory
compliance plans. |
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Proof of site control. |
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Contracts package (all
consultants, construction contract, insurance contracts, bonding
contracts, etc.). |
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Designs package (architectural,
site/civil, structural, environmental, MEP, etc.). |
To get your project started you
need to complete the initial feasibility analysis and applications package
and that means you need to have Rainmaker Marketing Corporation prepare
the package as due diligence and feasibility studies are a core discipline
and specialty of our firm. Give us a call.
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Do
You Know The Secret?
When it comes to commercial real
estate development finance, it doesn't matter whether you need to raise
$5 million or $50 million, the out-of-pocket costs, advance fees and
project due diligence costs will always require the same relative
investment dollars the promoters have to fund. Do you know what
that amount is? Do you know the Secret? |
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