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1. Georgia Department of Community Affairs _______________________________ Smyrna Business Association August 2, 2012

2. DCA incentives for Smyrna - Existing and Potential - • Opportunity Zones • State Small Business Credit Initiative (SSBCI)

3. Opportunity ZonesState Job Tax Credit

4. Job Tax Credit – Example of Benefits • Standard Tier 4 JTC: • Businesses must create at least 25 net new jobs to qualify for the credit of $750 per job • May take the credit against 50% of income tax liability • Credit limited to businesses engaged in manufacturing, warehousing and distribution, processing, research and development, tourism, broadcasting, and telecommunications (i.e. Business Enterprise definition)

5. Opportunity ZonesO.C.G.A. 48-7-40.1(c)(4) • General Strategy • Encourage local governments to use existing redevelopment statutes in an innovative fashion to revitalize blighted commercial, industrial and adjoining residential areas • Reward local governments and businesses that undertake such revitalization with access to maximum State Job Tax Credits • Operate state-wide, wherever eligible revitalization and redevelopment needs occur (rural, urban and suburban). • Support bottom up, locally driven initiatives through local collaborative partnerships

6. Tax Incentives • State designation of an Opportunity Zone allows: • ANY businesses (including retail) within the area to qualify for the State’s maximum job tax credit • Lower job creation threshold to 2 jobs to qualify for the state’s maximum job tax credit of $17,500 per job over 5 years (3,500 per year) • Allow credit against 100% of income tax liability, with excess credit available to claim against payroll withholding

9. Application, regulation, maps and more available at: www.dca.ga.gov/oz For questions on Smyrna’s OZ please contact: Jered Sigmon (678) 631-5419 Jsigmon@ci.smyrna.ga.us For general questions on OZ application process: Joanie Perry (404) 679-3173 joanie.perry@dca.ga.gov For questions about how to take the tax credit: Dawn Sturbaum (404) 679-1585 dawn.sturbaum@dca.ga.gov

10. Georgia Department of Community Affairs _______________________________

11. History & Background of State Small Business Credit Initiative (SSBCI) • Component of Small Business Jobs Act, bi-partisan legislation signed into law on Sep. 27, 2010 • $1.5 billion set aside for SSBCI, managed by U.S. Treasury, to strengthen state-run lending programs to support small business • Georgia’s allocation is $47,808,507 • Requirement for the state to generate overall 10:1 leverage

12. Advantages and Opportunities for Georgia Lenders • Credit enhancements to strengthen bank loans for small businesses • Delegated lending - Lenders manage underwriting process • SSBCI program - quick turnaround and streamlined format (days) • Opportunity for CRA credit

13. Advantages and Opportunities for Georgia Lenders • Opportunity to improve Safety and Soundness reviews • A distinguished panel of state and federal regulators participating in the roll-out of the SSBCI on 5/23/12 indicated a general consensus that lenders participation in the SSBCI Program is viewed positively by Safety & Soundness and Consumer Compliance Examiners. This resource panel continues to provide advice and assistance as program implementation progresses. • Georgia Department of Banking and Finance; Federal Reserve; Federal Deposit Insurance Corporation; and Office of Comptroller of Currency.

14. What Does Georgia SSBCI Offer? • Three new initiatives available to private lenders to expand small business lending • GCAP (Georgia Capital Access Program) - $10 million (Risk reserve pool funded with borrower/lender fees matched with SSBCI funds) • SBCG (Small Business Credit Guarantee) - $17.8 million (50% loan guarantee with a conversion option into a risk reserve pool offering up to 80% reimbursement) • Georgia Funding for CDFIs - $20 million (Loan participation program specifically designed for underserved SBs)

15. SSBCI – General Eligibility Criteria • Loan proceeds can be used for eligible “business purposes” including: • Start-up costs • Working capital • Business procurement, franchise fees • Equipment & inventory • Purchase, construction, renovation, or tenant improvements of eligible place of business

16. SSBCI – General Eligibility Criteria • Refinancing is not eligible; however, renewals are eligible under certain conditions … as one example… performing lines of credit that balloon and become due … new balance must increase by at least 10% • Passive real estate investment generally is not eligible. However, exception should at least 51% of existing commercial RE be occupied by owner).

17. SSBCI – Eligibility Criteria (cont.) • Eligible small businesses include corporations, partnerships, joint ventures, cooperatives, sole proprietorships, state-designated charitable & other non-profit institutions. • SBs generally defined as 500 or fewer employees • SSBCI participation generally limited to $500,000 or less, with exceptions and target amounts tailored for each program • Participating lenders and borrowers will be required to provide certain assurances and certifications as required by US Treasury SSBCI guidelines.

18. GCAP (Georgia Capital Access Program) • Provides risk reserve pool for lender by matching a required fee (2% to 7%) paid by the borrower, lender or combination, into a loan loss reserve fund for enrolled loans • SB loans of $500,000 or less (exceptions possible) • In case of default on enrolled loans, claims may be made against the loan loss reserve account for loss of principal and up to 90 days of accrued, but unpaid, interest • Borrower/bank fee may be financed through resulting loan. • Up to 100% of covered loan balance losses can be claimed.

19. GCAP CASE SAMPLE – Bldg Expansion & Inventory for Small Business

20. SBCG (Small Business Credit Guarantee) • The (“SBCG”) Program provides a 50% loan guarantee with a option to convert to risk reserve pool . • Enrolled loans are covered with a 50% loan guarantee; loans converted to risk reserve pool can be covered up to 80%. • SSBCI funds are leveraged with private capital from eligible lenders (banks, credit unions, qualified private lenders, and CDFIs). • Max terms for SBCG guarantee: • Lines of credit - 24 months • Amortizing loans – 48 months • Deficiency guarantee – Lender must diligently pursue collection from borrower prior to filing claim.

21. SBCG Case Sample – Accounts Receivable for Software Small Business

22. GA Funding for Community Development Financial Institutions (CDFIs) • GA Funding for CDFIs is a loan participation program specifically designed to increase access to capital for Georgia’s underserved small businesses (minority- and women-owned small businesses, and small businesses located in low- and moderate-income, minority, and other underserved communities). • CDFIs are private financial institutions certified by the U.S. Treasury to provide credit and financial services to underserved markets and populations. • http://www.cdfifund.gov

23. GA Funding for CDFIs – Two Options • State will enter into contractual relationship with CDFIs. Participating CDFIs will earn fees for underwriting, closing, and servicing SSBCI loans through participating in one of two capacities: • Loan originator/servicer – State forwards SSBCI funds directly to borrower. Receivables are returned to the State • Generally for-profit CDFI’s attached to commercial banks • Contracting entity– State forwards SSBCI funds to CDFI; CDFI loans SSBCI funds to borrower. CDFI may retain SSBCI loan payments and revolve these funds into future SSBCI projects. • Generally non-profit CDFI’s operating independently

24. GA Funding for CDFIs CaseSample –Bldg renovation & equipment for restaurant

25. Getting Started – What You Need to Know… Applications, Program Participation Agreements, Loan Enrollment Procedures, Transaction Documents, and Reporting Requirements & Compliance … www.georgia-ssbci.org No nonsense Delegated Lending means days until lender can begin to enroll SB loans …

26. For more info, contact: Holly Hunt, SSBCI Program Manager (404) 679-3144; holly.hunt@dca.ga.gov Brian Williamson, Assistant Commissioner (404) 679-1587; brian.williamson@dca.ga.gov www.georgia-ssbci.org Fax: (404) 679-1583