N.H. Admin. Code § Cdfa 310.17

Current through Register No. 50, December 12, 2024

Section Cdfa 310.17 - Business Benefit

(a) The applicant shall document the benefit to the business to be achieved as a result of the project.

(b) The maximum point value for this category shall be 110 points for business loans and real estate projects and 75 points for public infrastructure projects in support of economic development and grants to non-profits creating jobs.

(c) The applicant shall submit a detailed analysis and narrative pursuant to:

(1) Paragraph (d), if the project involves a loan to a private business;

(2) Paragraph (e), if the project involves real estate development through an EDE;

(3) Paragraph (f), if the project involves a public infrastructure improvement; or

(4) Paragraph (g), if the project involves a grant to a nonprofit creating jobs.

(d) The detailed analysis and narrative shall describe the business need for assistance and the value of the proposed loan assistance package to the business, with points awarded as follows:

(1) Up to 20 points based on the availability of non-CDBG match funding compared to the CDBG grant amount, as follows:

a. A score of 20 points if the match ratio is greater than 3:1;

b. A score of 10 points if the match ratio is between 1:1.1 and 3:1; or

c. A score of 0 points if the match ratio is equal to 1:1;

(2) Up to 20 points based on the payment capacity of the business to support the proposed debt, as follows:

a. A score of 20 points if the total debt coverage ratio is at or less than 1.3;

b. A score of 10 points if the total debt coverage ratio is greater than 1.3 but less than 1.5; or

c. A score of 0 if the total debt coverage ratio is 1.5 or greater;

(3) Up to 20 points based on the cash value of the CDBG assistance, as follows:

a. A score of 20 points if the value of the assistance is between 0% and 5% of the CDBG grant amount;

b. A score of 10 points if the value of the assistance is between 5.1% and 10% of the CDBG grant amount;

c. A score of 5 points if the value of the assistance is between 10.1% and 15% of the CDBG grant amount; or

d. A score of 0 points if the value of the assistance is greater than 15% of the CDBG grant amount; and

(4) Up to 50 points for the effect of the proposed loan on the financial stability of the EDE, as follows:

a. A score of 10 points if income from loan fees and interest is sufficient to contribute towards staff and overhead;

b. A score of 5 points if a minimum of 5% of income from loan fees and interest will be contributed towards a loan loss reserve;

c. A score of 5 points if a minimum of 5% of income from loan fees and interest will be contributed towards capitalization of the RLF;

d.Up to 10 points based on the term of the loan, as follows:

1. A score of 10 points if the principal is returned to the RLF in 3 years or less;

2. A score of 5 points if the principal is returned to the RLF in more than 3 years and up to 5 years; or

3. A score of 0 points if the principal is returned to the RLF in more than 5 years;

e.Up to 5 points based on the security position on real property, as follows:

1. A score of 5 points if the CDBG funded debt holds first or second position;

2. A score of 3 points if the CDBG funded debt holds third position; or

3. A score of 0 points if the CDBG funded debt holds less than third position;

f.Up to 5 points on the security position on machinery and equipment, as follows:

1. A score of 5 points if the CDBG funded debt holds first or second position;

2. A score of 3 points if the CDBG funded debt holds third position; or

3. A score of 0 points if the CDBG funded debt holds less than third position;

g.Up to 5 points based on the security position on all other business assets, as follows:

1. A score of 5 points if the CDBG funded debt holds first or second position;

2. A score of 3 points if the CDBG funded debt holds third position; or

3. A score of 0 points if the CDBG funded debt holds less than third position; and

h.Up to 5 points based on the security position of personal guarantees of the business owner(s), as follows:

1. A score of 5 points if the CDBG funded debt has an unconditional guarantee;

2. A score of 3 points if the CDBG funded debt has a limited guarantee; or

3. A score of 0 points if the CDBG funded debt has no guarantee.

(e) The detailed analysis and narrative shall describe the business need for assistance and the value of the proposed real estate assistance package to the business, with points awarded as follows:

(1) Up to 20 points based on the availability of non-CDBG match funding compared to the CDBG grant amount, as follows:

a. A score of 20 points if the match ratio is greater than 3:1;

b. A score of 10 points if the match ratio is between 1:1.1 and 3:1; or

c. A score of 0 points if the match ratio is equal to 1:1;

(2) Up to 20 points based on the financial ability of the private business to create or retain jobs, as follows:

a. A score of 20 points if the total debt coverage ratio is at or greater than 1.5;

b. A score of 10 points if the total debt coverage ratio is greater than 1.3 but less than 1.5; or

c. A score of 0 points if the total debt coverage ratio is at or less than 1.3;

(3) Up to 20 points based on the rent to be paid by the private business as compared to local market rates, as follows:

a. A score of 20 points if the rent is greater than market rate;

b. A score of 10 points if the rent is equal to market rate; or

c. A score of 0 points if the rent is less than market rate;

(4) Up to 20 points based on the cash value of the CDBG assistance, as follows:

a. A score of 20 points if the value of the assistance is between 0% and 5% of the CDBG grant amount;

b. A score of 10 points if the value of the assistance is between 5.1% and 10% of the CDBG grant amount;

c. A score of 5 points if the value of the assistance is between 10.1% and 15% of the CDBG grant amount; or

d. A score of 0 points if the value of the assistance is greater than 15% of the CDBG grant amount;

(5) Up to 20 points based on the effect of the lease payments generated from the real estate development on the financial stability of the EDE, as follows:

a. A score of 10 points if the income from the proposed rent is sufficient to pay for the debt service on the construction debt of the project;

b. A score of 5 points if the income from the proposed rent is sufficient and will be contributed to an operating reserve for the proposed real estate; or

c. A score of 5 points if the income from the proposed rent is sufficient and will be contributed to staff or overhead; and

(6) Up to 10 points based on the sale of the proposed real estate, as follows:

a. A score of 10 points if the proposed real estate has a lease with an option to buy in 5 years or less;

b. A score of 5 points if the proposed real estate has a lease with an option to buy in more than 5 and up to 7 years; or

c. A score of 0 points if the proposed real estate has a lease with an option to buy in more 7 years, or no option to buy, or an option to buy at an unknown time.

(f) The detailed analysis and narrative shall describe the business need for assistance and the value of the proposed infrastructure improvement to the municipality and the business, with points awarded as follows:

(1) Up to 20 points based on the availability of non-CDBG match funding compared to the CDBG grant amount, as follows:

a. A score of 20 points if the match ratio is greater than 3:1;

b. A score of 10 points if the match ratio is between 1:1.1 and 3:1; or

c. A score of 0 points shall be awarded if the match ratio is equal to 1:1;

(2) Up to 20 points based on the financial ability of the business to create the proposed jobs, as follows:

a. A score of 20 points if the business' debt coverage ratio is at or greater than 1.5;

b. A score of 10 points if the business' debt coverage ratio is greater than 1.3 but less than 1.5; or

c. A score of 0 points if the business' debt coverage ratio is at or less than 1.3;

(3) Up to 25 points based on the municipality's available debt capacity, as follows:

a. A score of 25 if the CDBG costs are 41% or more of municipal debt capacity;

b. A score of 20 if the CDBG costs are 31% to 40% of municipal debt capacity;

c. A score of 15 if the CDBG costs are 21% to 30% of municipal debt capacity;

d. A score of 10 if the CDBG costs are 11% to 20% of municipal debt capacity; or

d. A score of 5 if the CDBG costs are less than 11% of municipal debt capacity; and

(4) Up to 10 points based on the economic and community effects of the project on the municipality, as follows:

a. A score of 2 points if the project will have a positive, defined economic multiplier impact;

b. A score of 2 points if the project will increase the town's tax base;

c. A score of 2 points if the project increases the market value of a municipality's industrial park;

d. A score of 2 points if the project has positive effect on the health or safety of the project vicinity; or

e. A score of 2 points if the project reflects implementation of a specific aspect of the municipality's master plan.

(g) The detailed analysis and narrative shall describe the nonprofit business need for the assistance, with points awarded as follows:

(1) Up to 20 points based on the availability of non-CDBG match funding compared to the CDBG grant amount, as follows:

a. A score of 20 points if the match ratio is greater than 3:1;

b. A score of 10 points if the match ratio is 1:1.1 to 3:1; or

c. A score of 0 points if the match ratio is equal to1:1;

(2) Up to 20 points based on the financial strength of the nonprofit, as follows:

a. A score of 10 points if the nonprofit has reserves or documented future income which will support the on-going operation of the project; or

b. A score of 10 points if the nonprofit has successfully conducted fundraising for at least 2 years;

(3) Up to 20 points based on the management strength of the nonprofit, as follows:

a. A score of 10 points if the nonprofit has been in existence for 6 or more years

b. A score of 5 points if the nonprofit has been in existence for at least 2 years and up to 5 years;

c. A score of 5 points if the executive director has more than 2 years in the field of the nonprofit; or

d. A score of 5 points if a majority of the members of the board of directors of the nonprofit have served for 2 or more years; and

(4) Up to 15 points based on the economic and community effects of the project, as follows:

a. A score of 5 points if the project addresses a labor shortage in a field with community benefit;

b. A score of 5 points if the project provides training with a benefit to economic stability for a specific population, defined by the applicant, at-risk of unemployment; or

c. A score of 5 points if the project has a positive effect on the health or safety of the community served by the nonprofit.

N.H. Admin. Code § Cdfa 310.17

(See Revision Note at chapter heading for Cdfa 300) #8387, eff 6-29-05; ss and moved by #8515 (from Cdfa 310.10 )