Current through Register Vol. 54, No. 44, November 2, 2024
In addition to the factors in the act for application
evaluation, the Department will also review the following factors pertaining to
business evaluation, project criteria and public benefit criteria:
(1)
Business evaluation. The
historical performance of an eligible business will be evaluated to assess its
ability to repay the MELF loan. Specifically, this evaluation will include:
(i)
Financial performance of the
business. This involves an evaluation of 1 year pro forma projections
and the prior 3-year financial performance, including an examination of income
statements, balance sheets and cash flow statements. Start-up firms are
required to submit 3-year pro forma projections.
(ii)
Financial performance of the
owners. This involves an evaluation of the current personal financial
statement of the owners of the business.
(iii)
Market performance.
This involves an evaluation of the local and national market and the
applicant's current and projected position or market share.
(iv)
Management ability.
This involves an evaluation of the experience and skills of the proprietor,
partners or officers. This includes general business experience as well as
specialized experiences in the particular industry.
(2)
Project criteria. The
merits of the proposed use of loan proceeds and other project funds will be
assessed to determine the ability of the eligible business to repay the loan.
Specifically, this evaluation will include:
(i)
Projected sales and
revenues. This involves an assessment of the validity and accuracy of
the projections.
(ii)
Projected financial statements. A thorough credit analysis
will be performed using both historical and projected financial
statements.
(iii)
Value of
the assets and collateral. Appraisals, when appropriate, will be
required to assist the Department in evaluating its ability to secure the
loan.
(iv)
Changes in
market strategy or management strategy, or both. Proposed significant
changes in the business plan, market strategy or management team will be
reviewed.
(3)
Public benefit criteria.
(i)
The total full-time equivalent number of jobs to be created or retained, or
both, as a result of the project.
(ii) The number of jobs to be created or
retained, or both, for each MELF dollar invested.
(iii) The private investment to be leveraged
as a result of the MELF investment.
(iv) The increase in productivity.
(v) The strategic importance to the
Commonwealth of the industry or firm being assisted and the area being
served.
