backing the business of rural america backing the business of rural america pandor h. hadjy, deputy...

BACKING THE BACKING THE BUSINESS OF BUSINESS OF

RURAL RURAL AMERICAAMERICA

PANDOR H. HADJY, DEPUTY ADMINISTRATORPANDOR H. HADJY, DEPUTY ADMINISTRATORBUSINESS PROGRAMSBUSINESS PROGRAMS

1. Putting Money in the Hands of 1. Putting Money in the Hands of Rural Business OwnersRural Business Owners

B&I AccomplishmentsB&I AccomplishmentsFY 2009FY 2009

Number of loansNumber of loansDollars ObligatedDollars ObligatedJobs Created/SavedJobs Created/SavedBusinesses AssistedBusinesses AssistedApps and pre-apps pendingApps and pre-apps pendingDollars pendingDollars pendingPortfolio - # of BorrowersPortfolio - # of BorrowersPortfolio – Loan AmountPortfolio – Loan Amount

506506$1,244,618,158$1,244,618,15821,29621,296552552190190$680,889,331$680,889,3312,2992,299$5,401,994,463$5,401,994,463

Putting Money in the Hands of Rural Business Owners

B&I Quarterly Loan ObligationsB&I Quarterly Loan Obligations

$0$100,000,000$200,000,000$300,000,000$400,000,000$500,000,000$600,000,000$700,000,000$800,000,000

Dec-06

Mar-07

Jun

-07

Sep-07

Dec-07

Mar-08

Jun

-08

Sep-08

Dec-08

Mar-09

Jun

-09

Sep-09

Dec-09

Putting Money in the Hands of Rural Business Owners

$3 billion in lending support

FY 2010 PROGRAM LEVELSFY 2010 PROGRAM LEVELSBusiness and Industry GuaranteedBusiness and Industry GuaranteedBusiness and Industry Guaranteed – ARRABusiness and Industry Guaranteed – ARRARural Business Enterprise GrantsRural Business Enterprise GrantsIntermediary Relending ProgramIntermediary Relending ProgramRural Economic Development LoansRural Economic Development LoansRural Economic Development GrantsRural Economic Development GrantsRural Energy for America Program – LoansRural Energy for America Program – LoansRural Energy for America Program – GrantsRural Energy for America Program – GrantsBiorefinery Assistance ProgramBiorefinery Assistance ProgramRepowering Assistance ProgramRepowering Assistance ProgramPayments to Eligible Advanced Biofuel Payments to Eligible Advanced Biofuel ProducersProducers

$$ 993,001,876993,001,876$ 1,523,298,274$ 1,523,298,274$$ 41,956,000 41,956,000$$ 33,536,000 33,536,000$$ 33.077.000 33.077.000$$ 10,000,000 10,000,000$$ 264,372,580264,372,580$$ 63,279,580 63,279,580$ 803,476,177$ 803,476,177$$ 35,000,000 35,000,000$$ 80,000,000 80,000,000

Putting money in the Hands of Rural Business Owners

Guaranteed RenewableGuaranteed Renewable Energy ProgramsEnergy Programs

Section 9003 - Biorefinery Assistance ProgramSection 9003 - Biorefinery Assistance Program– Awarded $159.5 million for 3 advanced Awarded $159.5 million for 3 advanced

biorefinery loan guaranteesbiorefinery loan guarantees

Section 9007 -- Rural Energy for America Program Section 9007 -- Rural Energy for America Program (REAP): Loan guarantees of up to $25 million(REAP): Loan guarantees of up to $25 million

Putting money in the Hands of Rural Business OwnersPutting money in the Hands of Rural Business Owners

Renewable Energy Investments, 2003 - 09 Renewable Energy Investments, 2003 - 09 Renewable Energy Systems and Energy Efficiency Renewable Energy Systems and Energy Efficiency

Conversion ProjectsConversion Projects

Technology

Number of Projects

Grants, Loans, & Combos Amount

Amount Leveraged

Biomass 320 89,993,200 380,365,833

Wind 361 73,651,189 641,098,744

Solar 274 14,077,343 37,930,249Geothermal 99 3,080,395 8,374,339

Hybrid 22 2,935,648 86,720,575Hydropower 4 1,064,432 2,475,253

Subtotal 1,080 184,802,207 1,156,964,993

Energy Efficiency 2,428 80,566,465 192,211,677

EA/REDA 22 2,173,631

Feasibility Study 50

1,244,600

Combined Funding Activities 3,580 268,786,903 1,349,176,670


ARRA – B&IARRA – B&IRecovery Act Goals:Recovery Act Goals:

Create and Save JobsCreate and Save JobsSpur Economic ActivitySpur Economic ActivityLong-term Economic GrowthLong-term Economic GrowthAccountability and TransparencyAccountability and Transparency


ARRA B&IARRA B&I90% Guarantee up to $10 million90% Guarantee up to $10 million

1% Guarantee Fee1% Guarantee Fee

No Annual Renewal FeeNo Annual Renewal Fee

55 points = 90% Guarantee– 20 discretionary priority points if borrower

provides quality jobs and at least 1 of the 4 demographic criteria


ARRA B&I StatusARRA B&I Status203 projects approved for 203 projects approved for $695,086,036 or 46% of ARRA B&I $695,086,036 or 46% of ARRA B&I funds availablefunds available

Our goal is to spend 70% of ARRA Our goal is to spend 70% of ARRA funds by April 16, 2010funds by April 16, 2010


#2. Access to Loans for Rural Business #2. Access to Loans for Rural Business OwnersOwners

Access to LoansAccess to Loans

1,172 1,192 1,2561,418

0

450

900

1,350

1,800

FY 2007 FY 2008 FY 2009 FY 2010 YTD

Lenders in B&I Guaranteed Loan Program

Top 10 B&I Lenders in FY 2009Top 10 B&I Lenders in FY 2009$53,202,000 $53,202,000 $41,628,100 $41,628,100 $33,945,000 $33,945,000 $29,022,100 $29,022,100 $25,054,500 $25,054,500 $25,046,832 $25,046,832 $24,579,193 $24,579,193 $22,713,000 $22,713,000 $21,510,000 $21,510,000 $20,270,000 $20,270,000

RIDGESTONE BANKRIDGESTONE BANKEXCEL NATIONAL BANKEXCEL NATIONAL BANKBORREGO SPRINGS BANKBORREGO SPRINGS BANKCOMMUNITY SOUTH BANKCOMMUNITY SOUTH BANKAMERICAN TRUST & SAVINGS BANKAMERICAN TRUST & SAVINGS BANKAMERICAN BANK OF ST. PAULAMERICAN BANK OF ST. PAULHIGH TRUST BANKHIGH TRUST BANKPLAINS STATE BANKPLAINS STATE BANKBANK OF THE WESTBANK OF THE WESTBUSINESS CAROLINA, INCBUSINESS CAROLINA, INC


Summary of B&I Lender CaseloadsSummary of B&I Lender Caseloads

Number of LoansNumber of Loans Number of LendersNumber of Lenders

0101 878878

0202 278278

03 – 0503 – 05 189189

06 – 1006 – 10 4343

11 – 2011 – 20 1717

21 – 5021 – 50 1212

51 - 10051 - 100 11

Total:Total: 1,4181,418


Rural Development State Offices


Top 10 B&I Lenders


Active B&I Lenders in the Continental United States


Secondary MarketSecondary Market


Loans Sold on the Secondary Loans Sold on the Secondary Market Yield:Market Yield:

A premium when the loan is soldA premium when the loan is soldServicing fees for lendersServicing fees for lendersThe opportunity for entrepreneurs to invest in The opportunity for entrepreneurs to invest in rural Americarural AmericaNew partners (and capital) being brought to New partners (and capital) being brought to Rural AmericaRural AmericaA chance to play a part in the revitalization of A chance to play a part in the revitalization of depressed rural areasdepressed rural areas


#3. Listening to Lenders#3. Listening to Lenders

Report Card:Report Card:

Listening to Lenders

Difficulties With ProgramDifficulties With Program


Lender Survey PlusesLender Survey PlusesKnowledgeable EmployeesKnowledgeable EmployeesLong Term LoansLong Term LoansBetter RatesBetter RatesPre-approval processPre-approval processLarger LoansLarger LoansMore flexibilityMore flexibilityStreamlined ProcessStreamlined Process


Lender Survey MinusesLender Survey Minuses

- - TimeTime- - Difficulty with Construction LoansDifficulty with Construction Loans- - Environmental AssessmentsEnvironmental Assessments- - Vague RegulationsVague Regulations-- Lack of Consistency Lack of Consistency


Program GoalsProgram GoalsProgram GoalsProgram GoalsEnhance Lender ProfitsEnhance Lender ProfitsIncrease Commercial Credit in Rural AreasIncrease Commercial Credit in Rural AreasRural EmploymentRural EmploymentHelping BusinessHelping BusinessStimulating the EconomyStimulating the Economy““Sustainable Economic Development”Sustainable Economic Development”

““Give a man a fish; you have fed him for today. Teach a man to fish; and Give a man a fish; you have fed him for today. Teach a man to fish; and you have fed him for a lifetime”—Author unknown you have fed him for a lifetime”—Author unknown


#4. Honoring our Commitment to #4. Honoring our Commitment to Customer Service Customer Service

Reinvigorating our ProgramsReinvigorating our Programs

Initiatives for FY 2010Initiatives for FY 2010

The RBS 2010 initiatives involve The RBS 2010 initiatives involve Change!Change!

–Lenders and AssociationsLenders and Associations–EmployeesEmployees–ProgramsPrograms


Lender Requested Program Changes Lender Requested Program Changes

Improve ConsistencyImprove Consistency– Percent of GuaranteePercent of Guarantee– Issuing Guarantee Prior to ConstructionIssuing Guarantee Prior to Construction– Interim Construction FinancingInterim Construction Financing

Lender AdvocateLender Advocate



Created Business Created Business Programs Advisory Programs Advisory TeamsTeams– State and Field Office State and Field Office

Employee Employee EmpowermentEmpowerment

– Investment in our StaffInvestment in our StaffStaff TrainingStaff TrainingHiring StaffHiring Staff



Business Programs Regions

Difficulties With ProgramDifficulties With Program

Honoring our Commitment to Customer Service


Increase PartnershipsIncrease Partnerships

Lender Meetings/ForumsLender Meetings/Forums

Continuous Customer FeedbackContinuous Customer Feedback



Administrative Program Administrative Program EnhancementsEnhancements

Long Term Program ChangesLong Term Program Changes


Lender Requested Program ChangesLender Requested Program Changes

B&I program enhancementsB&I program enhancements

Best Practices of other Government Best Practices of other Government

Guaranteed ProgramsGuaranteed Programs

Program ConsistencyProgram Consistency



B&I program enhancements B&I program enhancements – Debt RefinancingDebt Refinancing– Lines of CreditLines of Credit– Preferred Lender ProgramPreferred Lender Program– Protective AdvancesProtective Advances– Secondary Market ImprovementsSecondary Market Improvements


Continuous Process ImprovementContinuous Process Improvement

Lender

Program

Employees


No One Can Sit On The Sidelines!No One Can Sit On The Sidelines!


Serving as the Advocate for Serving as the Advocate for Rural BusinessRural Business

GoalsGoalsImprove:Improve:– Customer serviceCustomer service

– Response timesResponse times

– Consistency by the statesConsistency by the states

– More authorities at the lowest levelMore authorities at the lowest level

– Timely Loss PaymentsTimely Loss Payments

Serving as the Advocate for Rural BusinessServing as the Advocate for Rural Business

RBS ARRA GoalsRBS ARRA Goals

JOBS, JOBS, JOBSJOBS, JOBS, JOBSRecord Program DeliveryRecord Program DeliveryService to Communities of Greatest NeedService to Communities of Greatest NeedBusiness Process ImprovementsBusiness Process ImprovementsMarketing ImprovementsMarketing ImprovementsLender Community ConfidenceLender Community Confidence

Serving as the Advocate for Rural BusinessServing as the Advocate for Rural Business

Success StoriesSuccess Stories

SummarySummary

1.1. Listening to LendersListening to Lenders2.2. Honoring our Commitment Honoring our Commitment

to Customer Serviceto Customer Service3.3. Putting money in the Hands Putting money in the Hands

of Rural Business Ownersof Rural Business Owners4.4. Access to Loans for Rural Access to Loans for Rural

Business OwnersBusiness Owners5.5. Serving as the Advocate for Serving as the Advocate for

Rural BusinessRural Business

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