Term Sheet

LISC/Morgan Stanley Small Business Loan Fund

Direct fund 100% of an SBA 504 loan first mortgage at below market rates in specific low- to moderate-income areas.

ELIGIBILITY

• BASED ON THE BUSINESS LOCATION IN A QUALIFIED CENSUS TRACT
• Located in one of LISC’s 30 Program Cities (see list at http://www.lisc.org/section/locations/offices) or Rural LISC program areas (see map at http://www.lisc.org/rural_lisc/partners/index.php)
• Call with business location or look up at: http://www.cohnreznick.com/NMTC-mapping-tool

PROGRAM PARAMETERS

• First Mortgage loan amounts from $250,000 to $2,500,000 for for-profit businesses to be used for real estate acquisition and/or capital improvements
• Premium of 3 points to selling bank (no mark-up allowed)
• Morgan Stanley to direct fund all loans
• EPC must be created for all transactions
• Properties must be multi-purpose (i.e. not single-purpose/specialized), for which the borrower occupies at least 51% of the space
• Collateral Coverage – Max 60% LTV
• Personal Credit – Minimum FICO of 680
• Cash Flow Coverage – Generally consistent with CDC global cash flow
• DSCR Requirement of 1:1 DSC for last fiscal year and interim
• 7-year lock out with no prepayment allowed
• Loan Fee of .5% for SBA participation fee

RATE & TERMS

• 30-year loan: interest-only for 3 years followed by 27 year amortization
• Fixed at 5 year libor swap + 275 basis points fixed for 7 years
• After 7 years adjusted to 90 day Libor Swap + 350 basis points with quarterly resets
• Click for current LIBOR swap rates: http://www.federalreserve.gov/releases/h15/update/

FOR MORE INFORMATION CONTACT: