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Helping Small Manufacturers Grow, Expand and Create Jobs in 5 Rural SC Counties

(ALLENDALE, BAMBERG, LEE, MARLBORO, AND WILLIAMSBURG)

The Rural Modernization Loan Participation Program, a pilot program, enables small manufacturing businesses in South Carolina obtain term financing to help replace outdated equipment or add additional equipment, ultimately creating and retaining jobs in South Carolina. By partnering with financial institutions, this program provides small business loans at attractive terms and, in certain situations, provides the business with a 25% forgiveness of the original principal amount of the loan.

A Total of $10 Million in Gross Equipment Loans for 5 SC Counties

Business Development Corporation of SC (BDC) has received approval from the SC Department of Commerce (DOC) and the Palmetto State Growth Fund (PSGF) to employ $2.5 million in credit enhancements for equipment financing to small business manufacturers. BDC will partner with approved South Carolina lenders and invest in qualifying loan participations. BDC estimates that at a 25% participation, $10 million of new loans will be created for this purpose. As borrowers repay these loans, those proceeds will be reinvested into new loans for manufacturers.

Rural Modernization Loan Participation Program Overview

This information is intended for use by both banks and borrowers. Although the details may appear somewhat daunting to a prospective borrower, most of the required documentation is between the bank and the borrower. These transactions are designed to be simple and non-bureaucratic for the bank and the borrower. The bank uses its internally prepared documents and no outside credit approvals are required beyond the Bank and BDC in order to speed the delivery to the borrower.

Rural Modernization Loan Participation Program

QUALIFYING BORROWERS Program is designed to target manufacturers seeking financing for equipment purchases. Loan amounts considered from $50,000 up to $1 million (exceptions may apply).
PARTICIPATION PERCENTAGE 25%, not to exceed $250,000
ELIGIBLE LOAN PURPOSES To purchase new or used equipment for replacement, upgrades or expansion of a business located in one of the five eligible counties.
MAXIMUM LOAN TERM Up to 10 years but not exceeding the useful life of the equipment.
INTEREST RATE/FEES Determined by the bank, subject to BDC concurrence.
FORM OF PARTICIPATION BDC will be subordinated to the lender in the event of default.
LOAN SERVICING Lender is responsible for all loan servicing and liquidation (if required).
DOCUMENTATION REQUIRED Master Loan Participation Agreement between Bank and BDC (only required once), Application for Participation, Bank's Underwriting Credit Memo and supporting financial information, BDC Commitment Letter, Participation Certificate and Borrower Certification.

Benefitting Both Small Manufacturers and Lenders

In addition to helping promote economic development and creating jobs in South Carolina, the Rural Modernization Loan Participation Program benefits both small manufacturers and lenders.

SMALL MANUFACTURING BORROWER LENDER
Provides small manufacturing business loans at attractive terms Reduces risk to lender which results in more favorable terms to borrower
Provides a flexible and non-bureaucratic resource for funding Provides credit alternatives that make manufacturing loans more attractive to the lender
Allows borrowers to receive a quick response to a loan request Keeps the banking service in the local community where it benefits all
Provides fast disbursement of funds to the borrower Provides the lender CRA credit for each transaction
When certain conditions as determined by the DOC are met, borrower receives a 25% forgiveness of the original amount of the debt Debt forgiveness will pay off BDC's participation balance, and borrower's financial strength will improve as a result of reduced debt outstanding

Participating Banks

The banks below are currently enrolled in the BDC SSBCI Loan Participation Program but may not be doing business in the named counties. However, since businesses in the named counties may bank with any of these banks, we included the entire list. The Rural Modernization Loan Participation Program will be operated by BDC as a sub-part of the existing SSBCI LPP.

Ameris Bank
Bank of Travelers Rest
Coastal Carolina National Bank
Coastal States Bank
Countybank
CresCom Bank
Dedicated Community Bank
Entegra Bank, A Division of Macon Bank
First Citizens Bank
Community Bank
First National Bank of SC
First Palmetto Bank
First Reliance Bank
Home Trust Bank
IBERIA Bank
Independence National Bank
Security Federal Bank
South State Bank
Southern First Bank
Synovus Bank
The Citizens Bank
United Community Bank

BDC Resources

Nat Green

Nat Green

Senior Vice President & Loan Officer

     803.744.0309
    803.744.0609
    NGreen@BDCofSC.org