The SCEC Loan Officer processes, analyzes, and presents your loan application to the Sunrise Loan Fund Committee for evaluation. The Loan Officer does NOT vote on your application.
The loan committee meets at large, depending on need, but typically within two weeks of receiving a completed application packet. A completed application packet includes not only loan application and personal finance statement, but financial documents such as cash-flow/pro-forma statements, balance sheets, income statements, tax returns, business plans, etc.
While SCEC strives to process loan applications as expeditiously as possible, the process will be slower than a typical lending institution because SCEC does not have the resources of a full-time lending department and relies on a volunteer loan committee.
Being a revolving loan fund, this is dependent on how much is available in the fund at any given time.
The minimum loan is $1,000 and the maximum loan is $250,000. A business can only have one active SLF loan at a time. Rare exceptions may be approved at the discretion of the SLF Loan Committee.
Interest rates and terms are decided by the SLF Loan Committee based upon the daily published Wall Street Journal daily Prime Interest Rate, current commercial rates, credit rating, credit risk, and other factors. Typical loans range at 2%-5% above the daily Prime Interest Rate.
All SLF loans must be secured by collateral. While the SLF prefers a first security position, other subordinate positions will be considered on collateral depending on the loan request and other factors such as the value of collateral offered, loan amount, credit history, credit risk, etc.
Like a bank, SLF has certain costs that must be passed on to its loan clients.
Closing costs vary depending on the nature and complexity of the loan. Documentation and processing fees range from 1% to 2%, depending on which loan product is accessed.
Typically, the most common costs are the credit report and State of Maine UCC fees. Other charges may include annual service fees, mortgage-filing fees, title insurance, attorney costs, etc. All costs are the responsibility of the borrower and are due at the loan closing unless other arrangements have been made in advance.
SLF funds are not intended to be used as stand-alone loans, or sole funding; they’re designed for gap financing, as SCEC is what is known as a Secondary Lender.
“Gap financing” covers the “gap” between what a lender will lend you and what you need to complete your business project. For example: If you secure 80%-90% of your project costs, the remaining 10%-20% is considered gap financing. It is not uncommon to see more than two participating lenders in larger loans.
By law, SCEC loans are not designed to compete with the banks and other financial institutions. They are intended to complement existing resources.