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Economic Development Finance Programs

» Sample Agenda

The core objective of this analytical course is to explain the financial tools used to stimulate private sector investment that results in the creation of permanent, private sector jobs, increased productivity and improvement in the local tax base. Specifically, the course will review current debt, equity, grant and incentive-based financing programs that are accessible to practitioners both rural and urban. Moreover, course participants will learn how to calculate debt/service ratios, cash on cash rate of return, capitalization rates, underwriting ratios, debt coverage ratios and similar financial tools used to identify project feasibility. Course instructors will also spend time teaching how potential investors measure return on investment (ROI) how lenders evaluate risk. Participants will have an opportunity to work through multiple case studies in order to solidify their knowledge of the finance programs.


Course Highlights:

• Learn how to help small businesses adjust the imbalance between cost and revenues
• Explore the fundamentals of reducing risk of default and foreclosure
• Understand credit risks - matching sources and uses of funds to lower monthly payment and strengthen cash flow position
• Review maturity risks - providing collateral substitution with guarantee of collateral cushion
• Evaluate Community Development Block Grants, Rural Business Enterprise Grants and Public Infrastructure Grants
• Revolving Loan Funds, Community Development Financial Institutions
• New Markets Tax Credits, Historic Preservation Tax Credits, Tax Increment Financing


Sample Agenda

Day 1

8:30 - 9:00 am


9:00 - 9:30 am

Welcome and Introductions

9:30 am - 12:30 pm

Economic Development Financing

• The Goals of Economic Development Finance
• Tools and Incentives
• Public Sector
• Private Sector
• Loans, Guarantees, Grants and Tax Incentives
• Calculating Debt Service

Case Study
• Source and Use Statement

12:30 - 2:00 pm

Lunch on your own

2:00 - 4:30 pm

Operating Business Financing Programs
• Program Models
• Subordinated Financing
• Loan Guarantees
• Micro Lending
• Equity Investments
• Small Business Administration (504, 7(a), and micorlending)
• Community Development Finance Institution
• Industrial Development Bonds (IDBs)

4:30 pm

Homework - Case Study

Day 2

8:30 - 9:00 am

Homework Review

9:00 - 10:00 am

Revolving Loan Funds
• Matching Sources and Uses of Funds
• Funding Sources
• Foundations
• Community Reinvestment Fund
• Banks and "Lending on a Spread"

Case Study

10:00 am - 12:00 pm

Financing Example: Business Loan Fund

12:00 - 1:00 pm

Lunch on your own

1:00 - 3:00 pm

Real Estate Financing

Key Financial Analysis Documents
• Source and Use Statement
• Operating Pro Forma

Permanent Lender Underwriting and Ratio Analysis
• Underwriting Issues
• Lender Ratios
-- Loan to Value Ratios
-- Debt Coverage Ratio

Case Study

1:00 - 3:00 pm

Public Financing Programs
• Subordinated Loan Programs
• CDBG – Float Loan Program
• CDBG – Section 108 Program
• Other methods public sector assist real estate development

4:00 pm

Homework - Case Study

Day 3

8:30 - 9:00 am

Homework Review

9:00 - 10:30 am

Taxes and Real Estate Development
• Cash Flow After Tax
• Depreciation
• Passive Income/Loss Limitations

Case Study

10:30 am - 12:00 pm

Low-Income Housing Tax Credits Rehabilitation Tax Credits (Historic Tax Credits)
• Tax Credit Thresholds
• Limited Partnerships

Case Study

12:00 - 1:30 pm

Lunch on your own

1:30 - 2:30 pm

Real Estate Development and New Markets Tax Credits
• Key Issues

Case Studies

2:30 - 3:00 pm

Pulling It All Together: Structuring
• Financing Tools
• Debt and Equity Vehicles
• Tax-exempt bond financing

* Agenda subject to change

**Please note: In order to receive full IEDC certification credit for this course and a certificate indicating course completion, participants must stay until the final session on the last day. Please make travel plans accordingly.