Engaging CRBT to bring longer term, fixed interest rate loans to assist rural business Team EDGE August 6, 2015 Presented by: Randy Frescoln Vice President, Specialty Finance Group 515.493-8118; cfrescoln@crbt.com
What can CRBT do for you? • Willing to make longer term, fixed interest rate loans in rural communities, which improves cash flow by lowering payments. Review projects and provide proposal • Work with local lenders
Who is CRBT? • Part of $2.5 billion asset, full service, community bank holding company • SBA Preferred Lender. # 1 SBA bank in Iowa over last six years (FY09 – 14) • USDA National Business & Industry Lender of the Year
What makes CRBT different from other community commercial lenders? • CRBT is willing to make long term, fixed interest rate business loans in ANY USDA eligible rural area within the Midwest Region.
Why use USDA Loan Guarantees 1. More financing options 2. Longer repayment terms (7/15/30 years) 3. Improved cash flow 4. Larger loan on rural collateral 5. Comfort against business cycle fluctuations
CRBT B&I Loan Guarantee Production • 26 Loan Guarantees, exceeding $87 million, closed in Iowa, Minnesota, South Dakota and Wisconsin. • 4 applications, exceeding $25 million, in process in Illinois and Iowa. • Loans range from $1 million to $21 million ($5 MM ave.) • No losses or delinquencies
CRBT B&I Customers • Manufacturers (50%) • Real Estate Holding Companies (from university housing to ex Maytag industrial complex) • Value added agriculture food and feed ingredient processors • Traditional Agricultural supply elevators • Convalescent homes • Residential mental health and substance abuse facilities • Office supply and stationery stores • Medical, dental and hospital equipment wholesaler
Example - Rural manufacturer wanted • $3.7 MM - purchase extruder equipment • $1.3 MM - expand facility • Keep line of credit local • To help anyway they can
Local lender wanted • Continue operating loan and business relationship • Mitigate legal lending limitations. 2001 purchase and 2006 expansion loans • To help anyway they can
Community wanted • Business to expand locally • USDA IRP RLF funds assisted in 2001 purchase. • USDA RBEG funds help develop industrial park • To help anyway they can
Rural Electric Cooperative wanted • Business to expand locally • 2001 – built / leased w option to buy building with USDA REDL Program. • 2006 – expansion with USDA REDG Program. • To help anyway they can
Italian equipment vendor wanted • Sell extruder press equipment • To help anyway they can
CRBT invited to table • Expertise and willingness to make long term, fixed interest rate loans in any USDA eligible rural area using USDA Loan Guarantee Programs • Willing to be good partner • To help anyway we can
Business – final result • Refinanced existing real estate debt, obtained new extruder equipment and facility expansion (favorable package) • 25 year term, fixed interest rate on RE • 15 year term, fixed interest rate on equipment
Local Lender – final result • Outstanding 2001 purchase and 2006 expansion loans paid off, which helped legal lending limit compliance • Maintained operating line and banking relationship • Participating with CRBT on new loans made
Community – final result • Existing company expanded locally • Job and tax base benefits • USDA IRP and RBEG ( now known as RBDG) established RLF funds available for future needs
Rural Electric Cooperative – final result • Existing 2006 REDG loan continues • New $150,000, 2% - 10 year loan to fund extruder equipment from REDG established RLF • New $1 million, 0% - 10 year REDL
Italian equipment vendor – final result • Extruder press equipment sale • Priced invoice in US dollars to eliminate currency risk to company and bank • 7 year note on portion of extruder sale until USDA REDL funds obtained
CRBT – final result • USDA B&I Loan Guarantee – 25 year term, fixed interest rate • USDA B&I Loan Guarantee – 15 year term, fixed interest rate • 7 year note on portion of extruder sale until USDA REDL funds obtained
Community Development Tool Kit • B&I Loan Guarantees - up to $25 MM • Establish community RLF a) RBDG $50 - $100 K b) IRP - $2/$15MM / $150K sub loan • REC - USDA REDL&G $1MM (L) or $300K (G) • CF Loan Guarantees – no limit • W&WD Loan Guarantees – no limit
CRBT has expertise rural business can bank on • Willing to make loans with longer repayment terms to rural business in any USDA eligible area • Willing to be a good partner with local development participants • We ask for a chance to review the project and provide a proposal
What makes CRBT different from other community commercial lenders? • CRBT is willing to make l_ _ _ term, f_ _ _ _ interest rate business loans in A_ _ USDA eligible rural area within the M_ _ _ _ _ _ Region.
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