Microfinance Programs s & , F.S.

The act consists of two programs: a loan program and a guarantee program. – 2014 Florida Senate Bill 1480 – 2014 Florida House of Representatives CS/HB 7023 The Microfinance Act

Short-term microloans of up to $50,000 to Florida Entrepreneurs and Small Businesses. The borrower must participate in business training and technical assistance provided by the Florida Small Business Development Network. The Microfinance Loan Program

To entrepreneurs and small businesses that employ no more than five people and generate annual gross revenues averaging no more than $250,000 per year for the last 2 years. 10% Set-aside

Loan guarantees may only be provided on loans between $50,000 and $250,000, and a guarantee cannot exceed 50 percent of the total loan amount. Microfinance Guarantee Program

Eligibility is limited to borrowers who are entrepreneurs or small businesses with 25 or fewer employees and gross annual revenues of up to $1.5 million. Under Both Programs

Must be located in this state. Application fee of up to $50. Microloans may be up to $50,000. Up to 1 year in duration. Interest rates up to the WJS Prime rate plus 1000 basis points. A borrower may receive a maximum of $75,000 in total microloans per year. A maximum of two microloans per year. Five microloans in a 3-year period. Borrower Eligibility and Conditions

Proceeds from a microloan can only be used for startup costs, working capital, and to purchase materials, supplies, furniture, fixtures, and equipment. Microfinance Loan Proceeds

Microloans may not be made if the microloan proceeds will be used to: Pay off creditors Provide funds, directly or indirectly, for payment, distribution, or as a microloan to owners, partners, or shareholders of the business, except as ordinary compensation for services rendered Finance the purchase, construction, or improvement of real property held for sale or investment Pay for lobbying activities Replenish funds used for any of the above purposes. Not Eligible for Both Programs

As a condition of receiving a microloan, the borrower must personally guarantee the microloan, participate in business training and technical assistance, and provide information regarding job creation and financial data to the loan administrator. Conditions

They are entitled to keep 1% of the total award amount for Administration costs. They are entitled to charge late fees. They are entitled to charge collection fees. They are entitled to amortize the loan for multiple years and rewrite the loan after 12 months for another 12 month term. How can the Loan Administrator make $?

Businesses that have recently been turned down by a bank or private lender. Businesses that have a great chance of getting bank financing within 12 to 36 months. Businesses that are looking for a short-term loan until their account receivables come in. Businesses that are trying to establish credit. Potential Target Market

To help Entrepreneurs and Small Businesses in Florida that are currently un-bankable to become bankable upon completing the loan program. Goals and Objectives

Program Partners

Garry Thomas, Government Analyst II Florida Department of Economic Opportunity Division of Community Development 107 East Madison Street Caldwell Bldg., MSC 160 Tallahassee, Florida Phone: Q&A