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Greetings & Happy New Year!
On December 8, 2006, BDC received funding of
$3,000,000 from the State of South Carolina in order
to operate the recently enacted SC CAP.
The idea for SC CAP was developed by Vern Amick,
currently chairman of the BDC board of directors.
After meeting with a colleague who was running a
successful CAP program in another state, Mr. Amick
decided this program was just what was needed to
help small businesses in South Carolina.
In 2002, Edwin Lesley continued Mr. Amick's efforts
with the help of Lloyd Hendricks and the South
Carolina Bankers Association and Tony Smith of the
SC Department of Commerce. In 2005, Walker Smith
of the SCBA also joined in the effort.
During 2004, the proposed bill was approved by the
House but stalled in the Senate. Fortunately,
however, the amendment to the act was approved
by both the House and the Senate in 2005 as a part
of Governor Sanford’s Job Creation Act. SC CAP was
signed into law by Governor Sanford on June 10,
2005.
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What is the SC Capital Access Program? |
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The SC Capital Access Program (SC CAP), a
newly
enacted lending program, is designed to provide
financial institutions operating in South Carolina a
flexible and non-bureaucratic tool to make business
loans that are considered more risky than
conventional loans and that may not meet
typical underwriting standards. It uses a small
amount of public resources to generate a large
amount of private financing for many small
businesses
that might not otherwise be able to obtain
finanical assistance.
SC CAP is based on an insuring concept and is
fundamentally different from the traditional type of
insurance or guarantee program. While the SBA or
other government programs guarantee individual
loans, SC CAP works on a portfolio concept.
In other words, a special reserve fund is set up to
cover future losses from a portfolio of loans that the
participating finanical institution makes under the
program. The SC CAP
reserve fund is not specific to individual loans, but is
used to offset losses on any loan in the participating
financial institution’s SC CAP portfolio.
Each loan made by a participating lender is
earmarked in that institution’s name, and the lender
may withdraw funds from the reserve only to cover
losses on loans that are enrolled into the program.
The reserve fund is provided by and owned by the
state, yet is managed by BDC.
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SC CAP - Benefits to Lending Institutions |
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Lending institutions participating under the SC
CAP
benefit in a number of ways:
- Cost – there are no initial costs to
participate in
the program
- Simplicity – there are few forms and no
delays as
the lender makes the credit decision and
chooses whether or not to include the loan in SC CAP
and at what reserve level
- Coverage – SC CAPs have established
over a
fifteen (15) year track record with the reserves
completely covering losses on program loans
- CRA – Both State and Federal authorities
are
aware of similar CAP programs around the country
and
have recognized participation by awarding CRA
credits in the past
This reserve enables an institution to be more
aggressive in making loans and expanding its market,
and to withstand a substantially higher loss rate than
it could tolerate under its conventional loan
portfolio. For example, these might be loans to
companies with good management and good
direction, but for one reason or another (such as lack
of adequate collateral, lack of sufficient track record,
lack of net worth, or other reason), they may fall
short of qualifying for a conventional loan.
Flexibility and simplicity are the key features of the
SC CAP. There is no need for BDC or the State to be
involved in reviewing the institution's credit decision
regarding the
loan. The institution makes the loan and simply
delivers a Loan Filing Form, along with payment of
the reserves funded by the borrower and lender to
BDC within 10 days after the loan is closed.
Enrollment of loans under the program is designed to
work as an automatic process. There is
no processing delay, and virtually no paperwork.
This means that the small businessperson can get a
quick response to a loan request and a much faster
disbursement of funds.
SC CAP represents another way that BDC is able to
carry out its corporate purpose of economic
development and job creation.
BDC would like to extend its appreciation to
Stan
Ashburne with Harbor National Bank, Culver
Choate with NBSC and Barry Stogner with First
Citizens Bank for lending their many years of
experience in drafting the Lender Participation
Agreement.
We would also like to congratulate Blencowe
Computer Services, Inc. on being awarded the
contract to develop software for the program.
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Meet our New Employee! |
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Miranda Helterman is the newest member of our
closing department. She joined BDC on October 15th,
filling the position vacated by Sherri Scearce who
was promoted to Loan Officer.
Born and raised in Columbia, SC, Miranda is a
graduate of Irmo High School and Winthrop
University where she studied Psychology and
Philosophy/Religion. She lives with her three Lhasa
Apsos Elliott, Blossom, and Rosie.
Miranda came to BDC with 5 years' experience in
the residential mortgage industry and is now learning
about the exciting world of Small Business Lending.
Sherri Scearce (formerly Sherri Cheek) came
to BDC in March 2001 with 10 years of Commercial
Real Estate experience. She began as a Loan Officer
Assistant, later moved over to our Closing
Department, and in September she was promoted to
the position of Loan Officer. She and her husband
are proud of their “blended” family and share a
daughter and 3 sons. Sherri is excited about the
opportunity to build relationships with bankers
statewide.
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BDC/CDC Christmas Drop-In |
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On December 5, BDC/CDC helds its annual
Christmas Drop-in at the Summit Club in Columbia.
The drop-in was a great opportunity to reunite and
socialize with our much appreciated friends and
business partners.
Thanks to all who were able to attend!
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2007 Banker Appreciation Golf Tournament |
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BDC & CDC will hold its second annual Banker
Appreciation Golf Tournament on Monday, April
23,
2007 at Mid-Carolina Golf Club in Prosperity.
All bankers who had a 7(a) or 504 loan approved by
BDC or CDC in 2005 or 2006 will be eligible to play in
the
tournament.
More details to come!
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