DIVISION OF ECONOMIC DEVELOPMENT

1. DIVISION OF ECONOMIC DEVELOPMENT Department of Commerce, Community, and Economic Development Presented By Cathy Jeans, Division Operations Manager April 4, 2012

2. Dept. of Commerce, Community, and Economic Development

3. Available Loan Programs

4. How Large is Alaska? Alaska’s Size • At 591,000 square miles, Alaska is as wide as the lower 48 states and larger than Texas, California and Montana combined.

5. Small Business Economic DevelopmentRevolving Loan Fund PURPOSE To provide private sector employment by financing the start-up and expansion of businesses that create significant long-term employment. To provide financing to small businesses in Alaska who are unable to obtain private financing for the entire project.

6. Small Business Economic DevelopmentRevolving Loan Fund ELIGIBLE AREAS Eligible areas includes all communities in the state of Alaska with a population of less than 30,000. Loans in communities of 30,000 or more are available on a limited basis, depending on funds availability.

7. Small Business Economic DevelopmentRevolving Loan Fund General Requirements • Loans must result in the creation or retention of jobs in an eligible area. • Applicants are required to match loan funds with cash or other private, non-public financing. The private match will be 1.5 times the loan amount requested. • Costs incurred prior to receipt of the application may not be used to meet the match requirement.

8. Small Business Economic DevelopmentRevolving Loan Fund General Requirements • Loans may not be made if a private lender is willing to finance the entire project. • Applicants must supply a turn down letter from a recognized lender listing the reason(s) for denial.

9. Small Business Economic DevelopmentRevolving Loan Fund TERMS AND CONDITIONS • Maximum Loan Amount: • $300,000 per project • Maximum Loan Term: • 20 Years – fixed assets • 5 Years – working capital • Fixed Interest Rate: • Prime – 4.0%; • 4.0% floor • Loans will be adequately secured

10. Small Business Economic DevelopmentRevolving Loan Fund TERMS AND CONDITIONS • Loans may be in a subordinate lien position to associated private sector loans. • Assets purchased with loan proceeds must be offered as collateral for the loan. • Personal guarantees are required of all persons holding 20% or more ownership interest in the business receiving the loan.

11. Rural Development Initiative Fund PURPOSE To provide private sector employment by financing the start-up and expansion of businesses that create significant long-term employment

12. Rural Development Initiative Fund ELIGIBILE AREAS • Loans may be made to a business located in an Alaskan community with a population of: • 5,000 or less, that is not connected by road or rail to Anchorage or Fairbanks • 2,000 or less, connected by road or rail to Anchorage or Fairbanks

13. Rural Development Initiative Fund General Requirements • Loan must create new jobs or retain existing jobs. • Loans may be made for commercial real estate, working capital, equipment or other commercial purposes. • Non-state funding must be a part of the total project cost. • Loans may not be made to pay costs that were incurred more than 6 months before receiving the loan application.

14. Rural Development Initiative Fund TERMS AND CONDITIONS • Maximum Loan Amount: • $150,000 per person • $300,000 for 2 or more people • Maximum Loan Term: • 25 Years • Fixed Interest Rate: • Prime – 1.0% • 4.0% floor • Adequately secured

15. Commercial Fishing Revolving Loan Fund PURPOSE To promote the development of a predominantly resident fisheries and vessel & gear upgrades for the purpose of improving the quality of Alaska seafood products.

16. Commercial Fishing Revolving Loan Fund General Requirements • Alaska resident for the past 2 years • No past due child support • Recent fishing experience in Alaska • Economic dependence on fishing

17. Commercial Fishing Revolving Loan Fund TERMS AND CONDITIONS • Maximum Loan Amount: • $300,000 or less, varies by program • Maximum Loan Term: • 15 years • Fixed Interest Rate: • Prime + 2% on most loan types • Prime – 2% on PQI loans, floor 3.0% • Prime – 2% on engine fuel efficiency loans, floor 3.0% • Priority lien required on item being purchased with loan proceeds

18. Commercial Fishing Revolving Loan Fund LOAN TYPES • Limited Entry Permit purchases • Vessel • Purchases • Refinances • Product Quality Improvement • Engine fuel efficiency upgrades • Gear purchases • IFQ purchases • Tender • Product Quality Improvements • Past due IRS taxes

19. Alaska Capstone Avionics Loan Program PURPOSE To provide long-term, low interest loans for the purchase and installation of avionics equipment related to Capstone and FAA’s NextGen program for aircraft that operate in Alaska.

20. State of AlaskaBusiness Resources Division of Economic Development Small Business Assistance Center commerce.alaska.gov/ded/dev/smallbus/home.cfm Economic Development Resources & Publications commerce.alaska.gov/ded/dev/econdev/econdev.htm Establishing a Business in Alaska www.commerce.state.ak.us/ded/fin/EstablishingABusiness.pdf Other Programs and Links commerce.alaska.gov/ded/programs/html

21. State of AlaskaBusiness Resources DIVISION OF ECONOMIC DEVELOPMENT OFFICES: Anchorage: Atwood Building (550th West 7th Avenue) Juneau: Vintage Business Park 1-800-478-LOAN Please visit us at: commerce.alaska.gov/ded/fin/index.cfml