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STATE OF CALIFORNIA CALIFORNIA INTEGRATED WASTE Revised August 2009 MANAGEMENT BOARD 1 RECYCLING MARKET DEVELOPMENT ZONE LOAN PROGRAM Loan and Fund Disbursement Process PROGRAM OVERVIEW The Recycling Market Development Zone Loan Program provides direct loans to businesses that use non- hazardous solid waste to manufacture new products. APPLICATION PROCESS Prior to submittal of an application, a potential applicant should first contact the loan program staff to receive an overview of the loan program and discuss the proposed loan eligibility and other loan requirements. Step 1: An applicant must submit one (1) complete original Recycling Market Development Zone Loan application package and supporting documents with original signatures. The application must be accompanied by a nonrefundable application fee of $300. Step 2: Within 10 business days of application submittal, staff will complete a preliminary review to determine application completeness and eligibility and send a letter stating one of the following: a) That the applicant is eligible for a loan, the application is complete, and will be evaluated by the Board staff; or b) That the application is incomplete, or that the applicant is ineligible for a loan, and specify the steps, if any, which the applicant may take to correct identified deficiencies; or c) That based upon an analysis of the financial information provided and other credit information, the applicant does not meet the credit standards for the program and will not be recommended for approval. Step 3: For applications meeting criteria (a) above, staff will then complete an analysis of the application and prepare a credit analysis. As a result of staff's review, additional information may be required. The analysis will outline staff's recommendation, including project description, project cost, proposed financing, diversion tonnages, job creation, loan amount, loan terms, and any special loan conditions. APPROVAL PROCESS Step 4: Applications which meet the following criteria will be recommended by staff to the Loan Committee: a) The applicant is creditworthy; b) Cash flow and collateral are appropriate for the requested loan amount; and c) The applicant has adequately demonstrated the appropriateness of the loan for use in the project. STATE OF CALIFORNIA CALIFORNIA INTEGRATED WASTE Revised August 2009 MANAGEMENT BOARD 2 Step 5: Each application which meets the criteria listed in Step 4 will be presented by staff to the Loan Committee. The Loan Committee will review the staff analysis of the loan request and either approve as submitted, approve with modifications, or deny the loan request. Each loan applicant (or designee) should participate in the Loan Committee conference call when their loan request is being considered. Step 6: After the Loan Committee reviews the application, the Loan Committee may submit a recommendation for loan approval to the Board’s Sustainability and Market Development Committee. This committee will consider the loan applicants project eligibility to divert tires from California landfills and ability to make tire recycled-content products. Each loan applicant should attend the committee and be present to respond to Board Member questions, if any. If the committee approves the loan, it typically is placed on the fiscal consent agenda for the full Board Meeting. Step 7: At the full Board Meeting, the members will consider the loan and approve funding. Loan applicants do not need to be present at the Board Meeting. DOCUMENTATION PROCESS Step 8: If the Board approves the loan, loan staff will prepare a Loan Commitment Letter setting forth the terms and conditions of the loan, which will be issued to the applicant for the applicant's acceptance. Step 9: Loan staff will prepare and send the loan applicant a final checklist of documents needed to prepare the loan documents. This may include copies of purchase orders, equipment vendor name and contact information, and other items. Step 10: After the applicant has accepted the loan, loan closing documents will be prepared. Loan closing must take place within 90 days of Board approval. FUND DISBURSEMENT PROCESS Step 11: The loan applicant will be required to open an escrow account at an escrow company of their choice. Loan documents will be sent to the escrow company for the borrower and guarantors to sign. Upon the Board’s receipt of properly executed loan documents, loan funds will be sent to the escrow company. The full loan amount will be sent to escrow. Step 12: The borrower may request the payment of equipment invoices by submitting the proper forms to the Board’s loan staff for review and approval. Step 13: Upon full disbursement of funds from escrow, the borrower may close the escrow account. Step 14: The borrower will receive monthly loan billing statements from the Board.
