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FEDDEV SODP LOAN PROGRAM

FEDDEV SODP LOAN PROGRAM. DK Phillips Consulting Inc. Program Eligibility. Commercial enterprise – public & private Small to medium-sized enterprises SME = Less than 1000 employees Southern Ontario location. Not Eligible. Retail/wholesale Real estate Government services

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FEDDEV SODP LOAN PROGRAM

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  1. FEDDEV SODP LOAN PROGRAM DK Phillips Consulting Inc.

  2. Program Eligibility • Commercial enterprise – public & private • Small to medium-sized enterprises • SME = Less than 1000 employees • Southern Ontario location

  3. Not Eligible • Retail/wholesale • Real estate • Government services • Accommodations and food services • Personal services

  4. Eligible Projects • Construction / acquisition of building – NO!! Explain • Machinery and equipment for project • Working capital requirements for expansion • Site improvements - land clearing & paving • Leasehold improvements required for project • Leased equipment & expenses under conditional sales • Patent searches, patents, trademarks, licenses • Start up costs - Insurance and interest

  5. Project Costs - Funding • Hard costs – 50% Capital Projects • Soft costs – 75% funding • Marketing & Training • Quality & Productivity improvements • Research and Development • Consultant advice • Contract bidding • Business development proposal • Business support

  6. Project Assessments • Economic development, innovations, and diversification • Economic impact – city, region, provincial, federal • Long term economic viability of project • Incremental nature of assistance • Demonstrated financial need – objective evidence • Applicant’s management capacity • Track record and viability of enterprise • Applicant’s financial contribution 10-20% • Leveraging of commercial financing / equity infusion • Level of risk • Adverse impacts

  7. FEDDEV Ontario Priority • Competitiveness and Productivity • Management consultants • Hiring technology experts • Advanced manufacturing • Innovation and Commercialization • Research and Development • Export Strategies • Adopt leading edge technologies • Community Development & Economic Diversification • Strategic planning • Business incubators • Technology and innovation parks

  8. Critical Information • Demonstrate 1) Business Need and 2) Business Impact • Loans are offered at 0% interest rate though FEDDEV • Commence loan repayment prior to Year 3 – Continuous • Loan term negotiable – Keep consistent with commercial lenders • SODP wants to see good ROI/Payback – (i.e. 18 - 24 months) • 10-20% “Skin in the Game” – Cash (i.e. bank statement ) • 30-40% debt or equity financing up to 50% (i.e. term sheet) • Balance of 50% from FEDDEV - higher if soft costs involved

  9. Critical Information • No security requirements – No personal or Corporate guarantees • Financials – Review Engagement or Audited Statements • Notice to Reader – FEDDEV considers risk • Business Case profile – soft costs 75% • Business Plan profile – anything above $25K guideline • First round of funding – incremental upon receipt of application • $40M 1st round – timing October 2nd – December 1st, 2009

  10. Good Projects • Favour SME’s in cities under 500,000 population • Favour projects starting prior to March 31, 2010 • No - Bricks and mortar • Leasehold improvements, innovations, technology, R & D • Jobs, jobs, jobs – Canadian jobs for export growth • Demonstrate economic benefits – City, region, province • Bring in 75% soft costs – R & D, consultation, Lean Mfg. • Have solid ROI/payback calculations • Approach the FEDEV without desperation – 60/40

  11. FEDDEV SODP $40M released for first round of funding FEDDEV applications after December 1st $60M allocated by end of December 2010 Continue to put in applications after December 1st Allowed to stack grants/funding, loans up to 50% www.southernontario.gc.ca for full details

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