PDF 504 Loan Application Document Checklist

504 LOAN APPLICATION DOCUMENT CHECKLIST

Lake Agassiz's 504 Loan Application - completed, signed & dated Lake Agassiz CDC Disclosure ? signed and date Statement of Personal History (Form 912) ? for each key manager, officer & director and each proprietor, partner & stockholder with 20% or more ownership of the borrower and/or operating company Personal Financial Statement (Form 413) & 2 Years Personal Tax Returns ? on each proprietor, partner, and stockholder with 20% or more ownership of the borrower and/or operating company. PFS must be current within 60 days and include spouse's signature if married. TR must include the K-1s for all entities reported on the return. Form 1244 (Part C) ? signed and dated by the borrowing entity AND by all guarantors. Please note the operating company will be a guarantor on the 504 loan and must sign and date. (Note: answer questions within the Part C) 4506-T Form ? completed by borrower, operating company and each individual with 20% or more ownership of the borrower and/or operating company. If loan involves the purchase of a business, the seller must also sign to verify any financial information obtained Authorization to Release Credit ? sign for each individual with 20% or more ownership for the borrower and/or operating company, the operating company, borrowing entity, and affiliate guarantor if applicable

Resume(s) ? on principals and key managers involved in day-to-day management

Driver's License ? for all principals 20% ownership or more

Legal Entity Documents (as applicable) o Corporation: articles of incorporation with all amendments and bylaws o Partnerships: state registration with all amendments and partnership agreement o Limited Liability Company: articles of organization with all amendments and operating agreement

Copy of lease(s), existing or proposed, Lake Agassiz CDC can provide an example lease that may be used

Project Cost Documentation - Purchase Agreement w/ all amendments, Itemized Construction & Equipment bids on vendor letterhead, must equal amount requested on application. For refinanced debt, must provide original note, mortgage, settlement statement, and statement of 2 years payment history. 2 Years Business Tax Return or Year-End P&L and Balance Sheet - for Borrower and Operating Company- if being purchased please obtain from the seller. If acquiring a business, a proforma/opening balance sheet will also be required. Current P&L and Balance Sheet and Aging Accounts Payable and Accounts Receivable - within 90 days for operating company and/or borrowing entity 2 Years Projected Income Statement for Operating Company- must include a written description of the assumptions for the operating business If New Business (operating for less than 2 years) provide detailed business plan & monthly cash flow analysis for the first 12 months of operation Affiliates Financial Statements ? 2 years tax returns or year-end P&L and balance sheet for all businesses in which any owner of operating company, the borrowing entity or any guarantor maintains 20% or more ownership or control Environmental Questionnaire ? completed and signed by Lender and Current Property Owner. Provide detailed answers to ALL questions. If a Transaction Screen, RSRA, Phase I, II, or III audit was conducted now or in the past, please remit a copy

Lenders Credit Memo Lender's Letter ? example letter to be provided by Lake Agassiz CDC Appraisal ? for project real estate and/or for any used equipment being purchased under the 504 loan. If land is not used as equity for the project please talk with loan officer on required submittal time. Appraisal must include Lake Agassiz CDC/SBA as intended user

SBA 504 Application Reminders

TITLE INSURANCE: Postponements in the issuance of the Title Policy cause delays in the funding of the SBA 504 Loan

When ordering, in addition to coverage for the Bank's permanent loan (if required), please request the interim financing insurance coverage for the Total Debenture Amount for SBA's portion of the 504 loan (approximately 110% of the interim financing).

The Bank will order title Insurance for the interim note in the Bank's name. However, the final policy WILL NOT be issued to the Bank. Please inform the Title Company, once SBA closes their loan, the interim loan final policy be changed and issued to Lake Agassiz CDC/The Small Business Administration (SBA). (This should be completed without any additional insurance charges; however there may be additional search charges.)

Per changes in SBA regulation and effective immediately, the cost for Title Insurance should be included in the total project cost as a professional fee in the total project cost and paid from the Bank's proceeds.

504 LOAN LEASE INFORMATION: When an Operating Company (OC) and Real Estate Holding Company (Borrower) exist. Please contact Lake Agassiz CDC for an example lease, if needed.

A copy of executed lease will be required with a term as long as or longer than the 504 maturity date. The lease must have language (listed below) that is subordinate to Lake Agassiz's mortgage and language (listed below) concerning lease payments from the Operating Company. If the lease does not contain this language an Amendment to the Lease can be provided by CDC and signed at closing to attach to the lease.

Subordination: This lease and all rights of Tenant hereunder shall be subject and subordinate to the lie of any and all mortgages that may not or hereafter affect the Leased Premises or any part thereof, and to any or all renewals, modifications or extensions of any such mortgages. Tenant shall, on demand, execute, acknowledge and deliver to Landlord, without expense to Landlord, any and all instruments that may be necessary or property to subordinate this Lease and all rights therein to the lien of any such mortgage or mortgages, and each renewal, modification or extension, and if Tenant shall fail at any time to execute, acknowledge and deliver any such subordination instrument, Landlord, in addition to any other remedies available in consequence thereof, may execute, acknowledge and deliver the same as Tenant's attorney in fact and in Tenant's name. Tenant hereby irrevocably makes, constitutes and appoints Landlord, its successors and assigns, its attorney in fact for the purpose.

Lease payments from the Operating Company: Rent paid by the Operating Company (OC) must be the same as the debt service on the Third Party Loan and the SBA 504 loan. The rent can also include additional amounts to cover the Eligible Passive Company's expenses of holding the property, if those expenses are not paid directly by the OC. A maintenance/repair and replacement reserve can be funded by the OC, if the OC is not responsible for those cost in the lease.

APPRAISAL: An appraisal will be required on all projects involving the purchase or construction of real estate and/or purchase of used equipment. All appraisals must be ordered by the participating partner lender and performed by a state-certified appraiser. The Appraisal must include Lake Agassiz CDC/SBA as intended user.

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