The loan, however, was not sufficient to meet the capital needs of the client—it did not provide the needed working capital for expansion, new facilities or land, nor did it pay off all remaining debt which was borrowed at much higher interest rates.

• $300,000 in additional working capital;
• Funds to purchase land for added production capabilities;
• Funds to purchase additional acreage for production reserves; and
• Better terms negotiation to allow the company to increase total debt from $1.26 million to $2.3 million, while reducing debt service payments by $17,000 per month.

Since the original loan, Business Finance & Development has arranged two additional loans for this client and is anticipating one additional expansion loan to fund continued growth of their business.

Since that original transaction, Business Finance & Development has provided refinancing for other facilities owned and operated by the client, and has helped the client develop a scalable model to provide their services to rural communities in Kansas and Oklahoma under the Community Facilities Program offered by the USDA.

Their current facilities were owned by another entity, and the client had been unable to convince the landlord to expand the facility.

The purchase allowed them to lower their monthly operating costs and increase their capacity. The improved cash flow that resulted from this decision was more than sufficient to pay for the expansion and meet the debt service obligation.

• Building a new 300,000 sq. ft. facility;
• Purchasing $300,000 of new equipment to modernize the facility;
• An additional $250,000 in working capital; and
• Paying off of a number of high interest, short-term loans and leases.

This restructured and expanded debt reduced total debt service by over $7,000 per month.

We were approached by a client that had developed a new product and a unique manufacturing process for that product. The client was thinly capitalized, and needed $3 million to acquire facilities, equipment and inventory in order to begin production.

We are currently in the process of arranging for additional financing to fund their first expansion. We also have assisted the client in developing an in-house leasing program designed to increase sales.

• A strong demand for the services in rural communities with populations of less than 20,000;
• Services that can help community leaders achieve stated goals; and
• Services that are typically capital-intensive and require debt to purchase or build a facility.

• Health care
• Communications
• Natural gas distribution

Other models will be developed as we discover operators who meet the program qualifications and have excellent track records in serving their customers.

It also offers exceptional opportunities for lending institutions to expand their service area and compete on the basis of their expertise in one or more industries.

Yet the process can be time-consuming and complex.

For lending institutions, we understand the financial and marketing value of guaranteed lending, and can serve as your experts and project facilitator, keeping your Loan Officers focused on business development. And for rural businesses, the benefits of guaranteed lending are significant:

• Higher loan amounts;
• Loans typically range from $1 to $5 million, but can go as high as $25 million;
• Less equity required than conventional loan programs;
• Longer repayment terms;
• Federal government guarantees for up to 90% of the loan amount;
• Funds can be used for land, buildings, equipment and working capital; and
• Banks can lend up to 10 times their legal lending limit.