FDC. The program is administered through Financial Development Corporations (“FDC”s) , in partnership with your Lender, of which there are 7 located across California. An FDC is akin to a CDC for a 504 Loan.
iBank. IBank has broad authority to issue tax-exempt and taxable revenue bonds, provide financing to public and private agencies, provide credit enhancements, acquire or lease facilities and leverage state and federal funds. iBank, for all intents and purposes, is providing the Lender guaranty much like the SBA does for 7A loans. To specifically NERD out....in the event of a default, it's a trust held by iBank that funds the guaranty. The program is not part of California’s budget. It is operated from a trust fund of $100MM today. Parameters are absolutely subject to change.
Much like the SBA 7A and 504 programs, borrowers work directly with a participating LENDER. The Lender loans the money directly to the borrower and quarterbacks the interaction with the Guaranty Program.
The application process involves the FDC underwriting the loan in tandem with your Participating Lender. Once your Lender and the FDC have both approved the loan it is then submitted to IBank for final approval. They issue the approval within a day or two of receiving the loan package and are primarily focused on program eligibility instead of credit standards.
• Can provide either term or revolving financing • Maximum guaranty period of 7 years • Loans are guaranteed at 80% of the loan, up to $2.5MM in maximum guaranteed dollars. Maximum gross loan amount is $20MM with a reduced guaranty percentage. • No prescribed limitations for interest rates or loan terms, however they are subject to review by iBank • Up front fee of 2.5% of the guaranteed portion of the loan plus a $250 doc fee is payable to the FDC, however there are no ongoing fees. Lender fees are permissible. • Most requirements should mirror SBA’s – collateral, personal guaranty, need for credit enhancement, etc.
FUN FACT (we think): The CSBLGP can be paired with a conventional Jr. loan subject to Lender lending criteria. This would be akin to some Lenders that are able to pair a SBA 7A loan with their bank's Jr. Conventional.