What We Are Looking For

1. Founding Team The management team should consist of the key individuals that can execute and achieve the critical milestones to the next stage of funding. It should ideally have a CEO that can lead the team even if the individual is not the long term CEO. In any case the team should be committed to building a company, passionate, accomplished, work well together, and be well referenced.
2. Market The opportunity to build a company really starts with the attractiveness of the market opportunity. The size and growth rate are the most important metrics but there are other factors that are also important. The industry structure, barriers to entry, customer switching costs, competitive landscape, behavior of incumbents, etc. all play into the attractiveness of the market. Small markets seldom deliver the opportunity to build big companies. We prefer companies that can deliver revenues of $1M to $100M within a four to five year period.
3. Product/Service The product or service offered should be disruptive and unique and solve a customer problem or meet a need. The value propositions should be clear and the product should not require significant behavioral change on the part of the customer.
4. Business Model The business model is the means by which you can develop a profitable business in a repeatable manner. We prefer businesses with high growth potential and sustainable gross margins.
5. Competition The management team should appreciate the competitive landscape and understand both its present and future direct and indirect competitors. They should also have a grasp on the sustainable competitive advantage that it can build through various means.
6. The BDC is primarily interested in teams that wish to build a company that can independently thrive and have the potential of creating quality jobs in Provo.

Program Details

Loan Amounts

Eligible Uses

Terms of Loans

Interest Rate

Qualifications

• Provo City Business License
• Completed Application
• Collateral must be available to secure the debt. (For loan amounts over $50,000, real estate collateral is preferred)
• Borrower to fund between 10% to 20% of project or business
• Borrowing company to be a closely held "for profit" business.
• All owners who own 20% or more of the business to guarantee the loan.
• Borrower to have an acceptable credit history. (670 or better Fair Isaac Risk Credit Score)
• Borrower is a legal US Resident
• Borrower must demonstrate the ability to create one job for every $15,000 - $25,000 borrowed with 51% of all jobs created benefitting persons of low to moderate income.

Evaluation Criteria Used by BDC Trustees

• How many jobs will be created now and in the future?
• Will funding take them to profitability?
• How well are they positioned now and in the future to attract additional monies?
• Do they have a first rate management team?
• Are they passionate?
• Do they have a sustainable competitive advantage?
• Are they positioned to move products to market quickly and efficiently?
• Do they qualify for local incubator admission?
• How do they stack up vs. the 5’c of credit? (credit, capacity, character, collateral, conditions)
• In any area that they are lacking, is the BDC able to assist or provide the contacts needed (or access to) to compensate?
• Is working with this company the highest and best use of the BDC’s limited time and resources?

Job Creation/Retention Criteria:

• Emphasis will be given to projects providing the greatest job creation potential. All loan recipients agree to create or retain jobs to be held by or made available to low- and moderate-income persons and to give first consideration in filling job openings to low- and moderate-income persons. They also agree to comply with the guidelines and document information needed for monitoring.

These jobs must be:

Other Terms & Conditions:

Insurance Requirements:

• A Key Man Life Insurance Policy shall be required on the company’s principal(s) for the amount of the loan. • The Borrower must also provide evidence in a form acceptable to the Provo City Redevelopment Agency of (1) comprehensive general liability insurance with minimum coverage amount of $1,000,000 per occurrence and $2,000,000 aggregate, with the Provo City Redevelopment Agency named as an "additional insured"; (2) Fire and Casualty Insurance upon any property, real or personal, owned or used by Borrower in its operations in an amount at least equal to all indebtedness against the property, with the Provo City Redevelopment Agency named as a "loss payee"; and a certificate of Workers Compensation Insurance sufficient to cover all the Borrower’s employees pursuant to the Utah State statutes. All insurance required as part of the loan will remain current and in force for the life of the loan. • Since the loan fund is to benefit Provo City businesses, if the company moves out of Provo City after receiving BDC funds the loan will become immediately due and payable.
• The Directors, Officers and Staff of the BDC adhere to strict confidentiality throughout the application and loan process. However, due to the nature of the BDC’s business, the BDC and its Directors, Officers and Staff will not sign any "non-disclosure agreement."
• The Directors, Officers and Staff of the BDC shall not discriminate against any applicant for a loan because of race, handicap, age, color, religion, sex, or nationality.