§ 71.103. Application evaluation.
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.
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