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Central New York Quasi-Equity Fund
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What Is It?
The Central New York Quasi-Equity Fund is designed to support the growth, start-up
and retention of manufacturing and producer-service firms in Central New York
by providing “quasi-equity” or mezzanine type financing.
Participants
The Fund currently includes three other participants who are approved by GSBDC
in order to be eligible to participate with GSBDC on an equal footing.
The Fund regularly seeks community-minded individuals or entities with a like
mindset who clearly understand our Mission to act as “participants”
in this Fund.
Eligible Projects
Funds can be used for almost any purpose with an aim towards job creation.
Quality and quantity of jobs are important components.
Eligible Businesses
Manufacturers and producer service businesses are eligible. Businesses which derive
most of their revenues from outside Central New York are preferred. Unlike venture
capital firms, our emphasis is not on companies who might go “public”
or be bought out by a large non-local company.
Lien Position
Where bank financing is involved, our lien position would usually be subordinate.
Otherwise, GSBDC may seek appropriate corporate and/or personal collateral.
Loan Specifications
Our risk profile falls between venture capital funds and conventional financing.
Seed capital is not envisioned.
Loans are usually undersecured or unsecured. Personal guaranties will be sought.
The structure is typically a debt instrument. The maximum GSBDC loan would
be $100,000 but the total maximum loan size may be much higher than GSBDC’s
individual maximum of $100,000 depending upon the number of “other participants”.
Term
Typical amortization period would be 5-7 years with a typical term of 3-5 years.
Interest Rate
Generally structured with an interest only period, followed by equal
principal payments plus interest for the remainder of the term.
The interest rates are fixed at a below-market rate.
Fees
An application fee of $250 is required and reimbursement of GSBDC legal fees.
In addition, a variable transaction fee is payable at the end of the term. This
transaction fee will compensate GSBDC for the level of risk undertaken, fund
losses, operational expenses, etc.
Application Process
- Business contacts GSBDC to outline project/financing need and determine eligibility.
- GSBDC provides application and list of other required information.
- After application is qualified by staff, a meeting is scheduled (if required
and approved by applicant) with the “other Participants” to determine
their interest level.
- The GSBDC Loan Committee and participants review with principals present.
If satisfactory, the Loan Committee recommends approval to the GSBDC Board within
days. A commitment letter is executed between GSBDC and the applicant subject
to the “other participants'” participation. Upon project completion,
a closing will take place.
Contact
Peggy A. Adams, Executive Director
How to apply - Calculate
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