Florida Senate - 2016 SB 1592
By Senator Gibson
9-01652A-16 20161592__
1 A bill to be entitled
2 An act relating to the Florida Microfinance Act;
3 amending s. 288.9931, F.S.; revising legislative
4 intent and conforming provisions to changes made by
5 the act; amending s. 288.9932, F.S.; providing and
6 revising definitions; amending s. 288.9934, F.S.;
7 revising the Microfinance Loan Program; providing that
8 Enterprise Florida, Inc., rather than the Department
9 of Economic Opportunity, is responsible for entering
10 into funding agreements with loan administrators;
11 revising loan administrator qualifications and
12 contracting requirements; authorizing microloan
13 interest charges and fees; revising the loan
14 administrator’s administrative servicing fee; revising
15 microloan eligibility; removing a study requirement;
16 conforming provisions; amending s. 288.9935, F.S.;
17 revising the Microfinance Guarantee Program; revising
18 requirements for the administrative contract between
19 the department and Enterprise Florida, Inc.; revising
20 eligibility and terms for loan guarantees; authorizing
21 surety bond guarantees; revising annual reporting
22 requirements; conforming provisions; amending s.
23 288.9936, F.S.; revising annual reporting requirements
24 for the Microfinance Loan Program; amending s.
25 288.9937, F.S.; revising the timeline for program
26 evaluation and reporting by the Office of Economic and
27 Demographic Research; providing an effective date.
28
29 Be It Enacted by the Legislature of the State of Florida:
30
31 Section 1. Section 288.9931, Florida Statutes, is amended
32 to read:
33 288.9931 Legislative findings and intent.—The Legislature
34 finds that the ability of a microbusiness entrepreneurs and
35 small businesses to access capital is vital to the overall
36 health and growth of this state’s economy; however, access to
37 capital is limited by the lack of available credit for a
38 microbusiness entrepreneurs and small businesses in this state.
39 The Legislature further finds that a microbusiness in this state
40 entrepreneurs and small businesses could be assisted through the
41 creation of a program that will provide an avenue for the
42 microbusiness entrepreneurs and small businesses in this state
43 to access credit. In addition Additionally, the Legislature
44 finds that business management training, business development
45 training, and technical assistance are necessary to ensure that
46 a microbusiness receiving credit support develops entrepreneurs
47 and small businesses that receive credit develop the skills
48 necessary to grow and achieve long-term financial stability. The
49 Legislature intends to expand job opportunities for this state’s
50 workforce by expanding access to credit to a microbusiness
51 entrepreneurs and small businesses. Furthermore, the Legislature
52 intends to avoid duplicating existing programs and to
53 coordinate, assist, augment, and improve access to those
54 programs for a microbusiness entrepreneurs and small businesses
55 in this state.
56 Section 2. Section 288.9932, Florida Statutes, is amended
57 to read:
58 288.9932 Definitions.—As used in this part, the term:
59 (1) “Applicant” or “borrower” means a microbusiness an
60 entrepreneur or small business that applies to a loan
61 administrator for a microloan.
62 (2) “Department” means the Department of Economic
63 Opportunity.
64 (3)(2) “Domiciled in this state” means authorized to do
65 business in this state and located in this state.
66 (4) “Entity” means a community development financing
67 institution, a surety provider as defined by the United States
68 Department of the Treasury, or a nonbank financial institution
69 specializing in microlending.
70 (5) “Lender” means a financial institution as defined in s.
71 655.005 or an entity as defined in subsection (4).
72 (6) “Loan administrator” means an entity that enters into a
73 contract with the department or Enterprise Florida, Inc.,
74 pursuant to s. 288.9934, to administer the Microfinance Loan
75 Program.
76 (7) “Loan Loss Reserve Fund” means a reserve pursuant to
77 the federal Small Business Administration Microloan Program or a
78 similar program.
79 (8) “Matching funds” means a source of capital obtained by
80 a lender to fund microloans pursuant to this part.
81 (9) “Microbusiness” means a small business that employs 5
82 or fewer persons, including the owner, and generates annual
83 gross revenues that average $100,000 or less per year for the
84 preceding 2 years.
85 (10) “Microloans” or “microlending” means lending to a
86 microbusiness that is provided with training and technical
87 assistance as necessary to strengthen the ability of the
88 borrower to repay the microloan and effectively manage the
89 microbusiness. More than one lender may provide capital to
90 underwrite a single microloan.
91 (3) “Entrepreneur” means an individual residing in this
92 state who desires to assume the risk of organizing, managing,
93 and operating a small business in this state.
94 (11)(4) “Network” means the Florida Small Business
95 Development Center Network.
96 (12)(5) “Small business” has the same meaning as provided
97 in s. 288.703 means a business, regardless of corporate
98 structure, domiciled in this state which employs 25 or fewer
99 people and generated average annual gross revenues of $1.5
100 million or less per year for the preceding 2 years. For the
101 purposes of this part, the identity of a small business is not
102 affected by name changes or changes in personnel.
103 (13) “Startup” means an enterprise that secures financing,
104 forms its business structure, and has been in operation for less
105 than 2 years.
106 (14) “Surety” means a written agreement between two parties
107 through which a bonding company guarantees the performance of
108 obligations covered by the agreement.
109 Section 3. Section 288.9934, Florida Statutes, is amended
110 to read:
111 288.9934 Microfinance Loan Program.—
112 (1) PURPOSE.—The Microfinance Loan Program is established
113 in the department to make short-term, fixed-rate microloans in
114 conjunction with business management training, business
115 development training, and technical assistance to
116 microbusinesses entrepreneurs and newly established or growing
117 small businesses for startup costs, working capital, and the
118 acquisition of materials, supplies, furniture, fixtures, and
119 equipment. Participation in the loan program is intended to
120 enable a microbusiness entrepreneurs and small businesses to
121 access private financing upon completing the loan program.
122 (2) DEFINITION.—As used in this section, the term “loan
123 administrator” means an entity that enters into a contract with
124 the department pursuant to this section to administer the loan
125 program.
126 (2)(3) LOAN ADMINISTRATOR QUALIFICATIONS REQUEST FOR
127 PROPOSAL.—
128 (a) By April 1, 2017, Enterprise Florida, Inc., shall enter
129 into a funding agreement with one or more eligible December 1,
130 2014, the department shall contract with at least one but not
131 more than three entities to administer the loan program and for
132 a term of 3 years. The department shall award the contract in
133 accordance with the request for proposal requirements in s.
134 287.057 to an entity that:
135 1. Is a legal entity corporation registered and domiciled
136 in this state;
137 2. Does not offer checking accounts or savings accounts;
138 2.3. Demonstrates that its board of directors and managers
139 are experienced in microlending and small business finance and
140 development;
141 3.4. Demonstrates that it has the technical skills and
142 sufficient resources and expertise to:
143 a. Analyze and evaluate applications by microbusinesses
144 entrepreneurs and small businesses applying for microloans;
145 b. Underwrite and service microloans provided pursuant to
146 this part; and
147 c. Assess, provide, and coordinate the provision of such
148 business management training, business development training, and
149 technical assistance as needed required by this part;
150 4.5. Demonstrates that it has established viable, existing
151 partnerships with public and private nonstate funding sources,
152 economic development agencies, and workforce development and job
153 referral networks; and
154 5.6. Demonstrates that it has a plan that includes proposed
155 microlending activities under the loan program, including, but
156 not limited to, the types of microbusinesses entrepreneurs and
157 businesses to be assisted and the size and range of microloans
158 that loans the loan administrator intends to make.
159 (b) To ensure that Prospective loan administrators must
160 submit the following information to Enterprise Florida, Inc.
161 meet the requirements of subparagraphs (a)2.-6., the request for
162 proposal must require submission of the following information:
163 1. A description of the types of microbusinesses in which
164 entrepreneurs and small businesses the loan administrator has
165 assisted in the past, and the average size and terms of loans
166 made to those microbusinesses in the past to such entities;
167 2. A description of the experience of members of the board
168 of directors and managers in the areas of microlending and small
169 business finance and development;
170 3. A description of the loan administrator’s underwriting
171 and credit policies and procedures, credit decisionmaking
172 process, monitoring policies and procedures, and collection
173 practices, and historical default rate, and samples of any
174 currently used loan documentation;
175 4. A description of the nonstate funding sources that will
176 be used by the loan administrator in conjunction with the state
177 funds to make microloans pursuant to this section;
178 5. The loan administrator’s three most recent financial
179 audits or, if no prior audits have been completed, the loan
180 administrator’s three most recent unaudited financial
181 statements; and
182 6. A conflict of interest statement from the loan
183 administrator’s board of directors certifying that a board
184 member, employee, or agent, or an immediate family member
185 thereof, or any other person connected to or affiliated with the
186 loan administrator, is not receiving or will not receive any
187 type of compensation or remuneration from a microbusiness that
188 receives an entrepreneur or small business that has received or
189 will receive funds from the loan program. The department may
190 waive this requirement for good cause shown. As used in this
191 subparagraph, the term “immediate family” means a parent, child,
192 or spouse, or any other relative by blood, marriage, or
193 adoption, of a board member, employee, or agent of the loan
194 administrator.
195 (3)(4) CONTRACT AND AWARD OF FUNDS.—
196 (a) The selected loan administrator must enter into a
197 contract with the department for a term of 3 years to receive
198 state funds for the loan program. Funds appropriated to the
199 program must be reinvested and maintained as a long-term and
200 stable source of funding for the program. The amount of state
201 funds used in any microloan made pursuant to this part may not
202 exceed 50 percent of the total matching funds amount on a single
203 microloan amount. Enterprise Florida, Inc., The department shall
204 establish financial performance measures and objectives for the
205 loan program and for the loan administrator in order to maximize
206 the state funds awarded. The selected loan administrator must:
207 1. Enter into a contract with Enterprise Florida, Inc., for
208 an initial term of 5 years to receive state funds for the loan
209 program.
210 2. Agree to a revolving loan fund structure.
211 (b) State funds may be used only to provide direct
212 microloans to microbusinesses entrepreneurs and small businesses
213 according to the limitations, terms, and conditions provided in
214 this part. Except as provided in subsection (4) (5), state funds
215 may not be used to pay administrative costs, underwriting costs,
216 servicing costs, or any other costs associated with providing
217 microloans, business management training, business development
218 training, or technical assistance.
219 (c) The loan administrator shall reserve 10 percent of the
220 total award amount from the department to provide microloans
221 pursuant to this part to entrepreneurs and small businesses that
222 employ no more than five people and generate annual gross
223 revenues averaging no more than $250,000 per year for the last 2
224 years.
225 (d)1. Enterprise Florida, Inc., If the loan program is
226 appropriated funding in a fiscal year, the department shall
227 distribute such funds to the loan administrator within 30 days
228 after of the execution of the contract by Enterprise Florida,
229 Inc., the department and the loan administrator.
230 2. The total amount of funding allocated to the loan
231 administrator in a fiscal year may not exceed the amount
232 appropriated for the loan program in the same fiscal year. If
233 the funds appropriated to the loan program in a fiscal year
234 exceed the amount of state funds received by the loan
235 administrator, such excess funds shall revert to Enterprise
236 Florida, Inc. the General Revenue Fund.
237 (e) Within 30 days of executing its contract with the
238 department, the loan administrator must enter into a memorandum
239 of understanding with the network:
240 1. For the provision of business management training,
241 business development training, and technical assistance to
242 entrepreneurs and small businesses that receive microloans under
243 this part; and
244 2. To promote the program to underserved entrepreneurs and
245 small businesses.
246 (f) By September 1, 2014, the department shall review
247 industry best practices and determine the minimum business
248 management training, business development training, and
249 technical assistance that must be provided by the network to
250 achieve the goals of this part.
251 (c)(g) The loan administrator must meet the requirements of
252 this section, the terms of its contract with Enterprise Florida,
253 Inc. the department, and any other applicable state or federal
254 laws to be eligible to receive funds in any fiscal year. The
255 contract with the loan administrator must specify any sanctions
256 for the loan administrator’s failure to comply with the contract
257 or this part.
258 (4)(5) COST OF FUNDS FEES.—
259 (a) Except as otherwise provided in this section,
260 Enterprise Florida, Inc., the department may not charge fees or
261 interest or require collateral from the loan administrator. The
262 department may:
263 1. Use funds appropriated from the state for reasonable
264 costs associated with the creation of documentation necessary to
265 administer microfinance programs.
266 2. Charge the loan administrator a variable interest that
267 will annually reset up to 50 percent of the prime rate published
268 in the Wall Street Journal, payable on a quarterly basis, as of
269 the start date specified in the contract for state funds
270 received under the loan program. Enterprise Florida, Inc., shall
271 require an assignment of the notes receivable of the microloans
272 made by the loan administrator as collateral. This collateral
273 can be pari passu or subordinate to prior liens, and Enterprise
274 Florida, Inc., shall reserve the right to require additional
275 collateral.
276 3. Charge a fee for the use of guarantee funds for a Loan
277 Loss Reserve Fund. Enterprise Florida, Inc., shall require an
278 assignment of the Loan Loss Reserve Fund as collateral. This
279 collateral can be pari passu or subordinate to prior liens, and
280 Enterprise Florida, Inc., shall reserve the right to require any
281 additional collateral. charge an annual fee or interest of up to
282 80 percent of the Federal Funds Rate as of the date specified in
283 the contract for state funds received under the loan program.
284 The department shall require as collateral an assignment of the
285 notes receivable of the microloans made by the loan
286 administrator under the loan program.
287 (b) The loan administrator is entitled to retain a one-time
288 administrative servicing fee of 5 1 percent of the total award
289 amount to offset the administrative costs of underwriting and
290 servicing microloans made pursuant to this part. This fee may
291 not be charged to or paid by microloan borrowers participating
292 in the loan program. Except as provided in paragraph (6)(c)
293 (7)(c), the loan administrator may not be required to return
294 this fee to Enterprise Florida, Inc. the department.
295 (c) The loan administrator may not charge interest, fees,
296 or costs except as authorized in subsection (8) (9).
297 (d) Except as provided in subsection (6) (7), the loan
298 administrator is not required to return the interest, fees, or
299 costs authorized under subsection (8), as long as the loan
300 administrator remains in compliance and good standing (9).
301 (5)(6) REPAYMENT OF AWARD FUNDS.—
302 (a) After collecting interest and any fees or costs
303 permitted under this section in satisfaction of all microloans
304 made pursuant to this part, the loan administrator shall remit
305 to Enterprise Florida, Inc., the department the microloan
306 principal collected from all microloans made with state funds
307 received under this part at the end of the contract, unless
308 provisions for contract renewal are provided. Repayment of
309 microloan principal to Enterprise Florida, Inc., the department
310 may be deferred by Enterprise Florida, Inc., the department for
311 a period not to exceed the maturity date of the microloan terms
312 6 months; however, the loan administrator may not provide a
313 microloan under this part after the contract with Enterprise
314 Florida, Inc., the department expires.
315 (b) If for any reason the loan administrator is unable to
316 make repayments to Enterprise Florida, Inc., the department in
317 accordance with the contract, Enterprise Florida, Inc., the
318 department may accelerate maturity of the state funds awarded
319 and demand repayment in full. In this event, or if a loan
320 administrator violates this part or the terms of its contract,
321 the loan administrator shall surrender to Enterprise Florida,
322 Inc., the department possession of all collateral required
323 pursuant to subsection (4) (5). Any loss or deficiency greater
324 than the value of the collateral may be recovered by Enterprise
325 Florida, Inc., the department from the loan administrator.
326 (c) In the event of a default as specified in the contract,
327 termination of the contract, or violation of this section, the
328 state may, in addition to any other remedy provided by law,
329 bring suit to enforce its interest.
330 (d) A microloan borrower’s default does not relieve the
331 loan administrator of its obligation to repay an award to the
332 department.
333 (6)(7) CONTRACT TERMINATION.—
334 (a) The loan administrator’s contract with Enterprise
335 Florida, Inc., the department may be terminated by Enterprise
336 Florida, Inc. the department, and the loan administrator
337 required to immediately return all uncommitted state funds
338 awarded, including any interest, fees, and pro rata costs it
339 would otherwise be entitled to retain pursuant to subsection (4)
340 (5) for that fiscal year, upon a finding by Enterprise Florida,
341 Inc., the department that:
342 1. The loan administrator has, within the previous 5 years,
343 participated in a state-funded economic development program in
344 this or any other state and was found to have failed to comply
345 with the requirements of that program;
346 2. The loan administrator is currently in material
347 noncompliance with any statute, rule, or program administered by
348 Enterprise Florida, Inc., or the department;
349 3. The loan administrator or any member of its board of
350 directors, officers, partners, managers, or shareholders has
351 pled no contest to or been found guilty, regardless of whether
352 adjudication was withheld, of any felony or any misdemeanor
353 involving fraud, misrepresentation, or dishonesty;
354 4. The loan administrator failed to meet or agree to the
355 terms of the contract with Enterprise Florida, Inc., the
356 department or failed to meet this part; or
357 5. Enterprise Florida, Inc., The department finds that the
358 loan administrator provided fraudulent or misleading information
359 to Enterprise Florida, Inc. the department.
360 (b) The loan administrator’s contract with Enterprise
361 Florida, Inc., the department may be terminated by Enterprise
362 Florida, Inc., the department at any time for any reason upon 30
363 days’ notice by Enterprise Florida, Inc. the department. In such
364 a circumstance, the loan administrator shall return to
365 Enterprise Florida, Inc., all uncommitted awarded state funds
366 awarded to the department within 60 days after of the
367 termination. However, the loan administrator may retain any
368 interest, fees, or costs it has collected pursuant to subsection
369 (4) (5).
370 (c) The loan administrator’s contract with Enterprise
371 Florida, Inc., the department may be terminated by the loan
372 administrator at any time for any reason upon 30 days’ notice by
373 the loan administrator. In such a circumstance, the loan
374 administrator shall return to Enterprise Florida, Inc., all
375 uncommitted awarded state funds awarded to the department,
376 including any interest, fees, and costs it has retained or would
377 otherwise be entitled to retain pursuant to subsection (4) (5),
378 within 30 days after of the termination.
379 (7)(8) AUDITS AND REPORTING.—
380 (a) The loan administrator shall annually submit to
381 Enterprise Florida, Inc., the department a financial audit
382 performed by an independent certified public accountant and an
383 operational performance audit for the most recently completed
384 fiscal year. Both audits must indicate whether any material
385 weakness or instances of material noncompliance are indicated in
386 the audit.
387 (b) The loan administrator shall submit quarterly reports
388 to Enterprise Florida, Inc., the department as required by s.
389 288.9936(2) 288.9936(3).
390 (c) The loan administrator shall make its books and records
391 related to the loan program available to the department or
392 Enterprise Florida, Inc., or its designee for inspection upon
393 reasonable notice.
394 (8)(9) ELIGIBILITY AND APPLICATION.—
395 (a) To be eligible for a microloan, an applicant must, at a
396 minimum, be a microbusiness an entrepreneur or small business
397 located in this state.
398 (b) Microloans may not be made if the direct or indirect
399 purpose or result of granting the microloan would be to:
400 1. Pay off any creditors of the applicant, including the
401 refund of a debt owed to a small business investment company
402 organized pursuant to 15 U.S.C. s. 681, unless the restructuring
403 of the refinanced debt reflects a documented business purpose
404 and improves cash flow or reduces debt service by at least 10
405 percent;
406 2. Provide funds, directly or indirectly, for payment,
407 distribution, or as a microloan to owners, partners, or
408 shareholders of the applicant’s business, except as ordinary
409 compensation for services rendered;
410 3. Finance the acquisition, construction, improvement, or
411 operation of real property which is, or will be, held primarily
412 for sale or investment;
413 4. Pay for lobbying activities; or
414 5. Replenish funds used for any of the purposes specified
415 in subparagraphs 1.-4.
416 (c) A microloan applicant shall submit an a written
417 application in the format prescribed by the loan administrator
418 and Enterprise Florida, Inc., and shall pay an application fee
419 not to exceed $50 to the loan administrator.
420 (d) The following minimum terms apply to a microloan made
421 by the loan administrator:
422 1. The amount of a microloan may not exceed $50,000;
423 2. A borrower may not receive more than $75,000 per year in
424 total microloans under this loan program;
425 3. A borrower may not receive more than two microloans per
426 year and may not receive more than five microloans in any 3-year
427 period under this loan program;
428 4. The proceeds of the microloan may be used only for
429 startup costs, working capital, tenant improvements, and the
430 acquisition of materials, supplies, furniture, fixtures, and
431 equipment;
432 5. The period of any microloan may not exceed 5 years 1
433 year;
434 6. The interest rate may not exceed the prime rate
435 published in the Wall Street Journal as of the date specified in
436 the microloan, plus 500 1000 basis points;
437 7. All microloans must be personally guaranteed;
438 8. The borrower must complete participate in business
439 management training, business development training, and
440 technical assistance as determined by the loan administrator in
441 the microloan agreement as a condition of initial funding. The
442 loan administrator shall determine the provider of training and
443 technical assistance. The cost of such training and technical
444 assistance must be reasonable and can be included in the
445 microloan and payable from matching funds;
446 9. The borrower shall provide such information as required
447 by the loan administrator, including monthly job creation and
448 financial data, in the manner prescribed by the loan
449 administrator; and
450 10. The loan administrator may collect fees for late
451 payments which are consistent with standard business lending
452 practices and may recover costs and fees incurred for any
453 collection efforts necessitated by a borrower’s default.
454 (e) The department or Enterprise Florida, Inc., may not
455 review any microloans made by the loan administrator pursuant to
456 this part before approval of the loan by the loan administrator.
457 (9)(10) STATEWIDE STRATEGIC PLAN.—In implementing this
458 section, the department shall be guided by the 5-year statewide
459 strategic plan adopted pursuant to s. 20.60(5). The department
460 shall promote and advertise the loan program by, among other
461 things, cooperating with government, nonprofit, and private
462 industry to organize, host, or participate in seminars and other
463 forums for microbusinesses entrepreneurs and small businesses.
464 (11) STUDY.—By December 31, 2014, the department shall
465 commence or commission a study to identify methods and best
466 practices that will increase access to credit to entrepreneurs
467 and small businesses in this state. The study must also explore
468 the ability of, and limitations on, Florida nonprofit
469 organizations and private financial institutions to expand
470 access to credit to entrepreneurs and small businesses in this
471 state.
472 (10)(12) CREDIT OF THE STATE.—With the exception of funds
473 appropriated to the loan program by the Legislature, the credit
474 of the state may not be pledged. The state is not liable or
475 obligated in any way for claims on the loan program or against
476 the loan administrator or the department.
477 Section 4. Section 288.9935, Florida Statutes, is amended
478 to read:
479 288.9935 Microfinance Guarantee Program.—
480 (1) PURPOSE.—The Microfinance Guarantee Program is
481 established in the department. The purpose of the program is to
482 stimulate access to credit for microbusinesses entrepreneurs and
483 small businesses in this state by providing targeted guarantees
484 to loans or surety made to such microbusinesses entrepreneurs
485 and small businesses. Funds appropriated to the program must be
486 reinvested and maintained as a long-term and stable source of
487 funding for the program.
488 (2) As used in this section, the term “lender” means a
489 financial institution as defined in s. 655.005.
490 (3) CONTRACT.—The department must enter into a contract
491 with Enterprise Florida, Inc., to administer the Microfinance
492 Guarantee Program. In administering the program, Enterprise
493 Florida, Inc., must, at a minimum:
494 (a) Establish eligibility requirements for lenders and
495 borrowers lender and borrower eligibility requirements in
496 addition to those provided in this section;
497 (b) Determine a reasonable leverage ratio of loan or surety
498 amounts guaranteed to state funds; however, the leverage ratio
499 may not exceed 5 3 to 1;
500 (c) Establish reasonable fees and interest;
501 (d) Promote the program to lenders financial institutions
502 that provide loans or surety to microbusinesses entrepreneurs
503 and small businesses in order to maximize the number of lenders
504 throughout the state which participate in the program;
505 (e) Enter into a memorandum of understanding with the
506 network to promote the program to underserved entrepreneurs and
507 small businesses;
508 (e)(f) Establish limits on the total amount of loan
509 guarantees that a single lender can receive;
510 (g) Establish an average loan guarantee amount for loans
511 guaranteed under this section;
512 (f)(h) Establish procedures to address default and payment
513 of a guarantee a risk-sharing strategy to be employed in the
514 event of a loan failure; and
515 (g)(i) Establish financial performance measures and
516 objectives for the program in order to maximize the state funds.
517 (3) ALLOWABLE ADMINISTRATIVE COSTS.—Enterprise Florida,
518 Inc., may not use funds appropriated from the state for costs
519 associated with administering the guarantee program except as
520 provided in this part.
521 (4) ELIGIBILITY AND APPLICATION.—
522 (a) Enterprise Florida, Inc., must provide the following
523 minimum guarantee terms:
524 1. Total loan guarantee Enterprise Florida, Inc., is
525 limited to providing loan guarantees for loans with total loan
526 amounts of at least $50,000 but and not more than $250,000. A
527 loan guarantee may not exceed 50 percent of the total loan
528 amount, except that transactions originated by a community
529 development financing institution or a nonbank financial
530 institution may not exceed 75 percent.
531 2. Total surety bond amounts of at least $25,000 but not
532 more than $1 million. A guarantee may not exceed 25 percent of
533 the total surety amount.
534 3. Total Loan Loss Reserve Fund amounts of not more than
535 $300,000. A Loan Loss Reserve Fund may not exceed 25 percent of
536 the total Small Business Association Microloan Program award
537 amount.
538 (b)(5) Enterprise Florida, Inc., may not guarantee a loan
539 if the direct or indirect purpose or result of the loan would be
540 to:
541 1.(a) Pay off any creditors of the applicant, including the
542 refund of a debt owed to a small business investment company
543 organized pursuant to 15 U.S.C. s. 681, unless the restructuring
544 of the refinanced debt reflects a documented business purpose
545 and improves cash flow or reduces debt service by at least 10
546 percent;
547 2.(b) Provide funds, directly or indirectly, for payment,
548 distribution, or as a loan to owners, partners, or shareholders
549 of the applicant’s business, except as ordinary compensation for
550 services rendered;
551 3.(c) Finance the acquisition, construction, improvement,
552 or operation of real property which is, or will be, held
553 primarily for sale or investment;
554 4.(d) Pay for lobbying activities; or
555 5.(e) Replenish funds used for any of the purposes
556 specified in subparagraphs 1.-4. paragraphs (a)-(d).
557 (6) Enterprise Florida, Inc., may not use funds
558 appropriated from the state for costs associated with
559 administering the guarantee program.
560 (c)(7) To be eligible to receive a loan guarantee under the
561 Microfinance Guarantee Program, a borrower must, at a minimum:
562 1.(a) Be a microbusiness an entrepreneur or small business
563 located in this state; and
564 (b) Employ 25 or fewer people;
565 (c) Generate average annual gross revenues of $1.5 million
566 or less per year for the last 2 years; and
567 2.(d) Meet any additional requirements established by
568 Enterprise Florida, Inc.
569 (5) AUDITS AND REPORTING.—
570 (a)(8) By October 1 of each year, Enterprise Florida, Inc.,
571 shall submit a complete and detailed annual report to the
572 department for inclusion in the department’s report required
573 under s. 20.60(10). The report must, at a minimum, provide:
574 1.(a) A comprehensive description of the program, including
575 an evaluation of its application and guarantee activities,
576 recommendations for change, and identification of any other
577 state programs that overlap with the program;
578 (b) An assessment of the current availability of and access
579 to credit for entrepreneurs and small businesses in this state;
580 2.(c) A summary of the financial and employment results of
581 the microbusinesses entrepreneurs and small businesses receiving
582 loan guarantees, including the number of full-time equivalent
583 jobs created as a result of the guaranteed loans and the amount
584 of wages paid to employees in the newly created jobs;
585 3.(d) Industry data about the borrowers, including the six
586 digit North American Industry Classification System (NAICS)
587 code;
588 4.(e) The name and location of lenders that receive loan
589 guarantees;
590 5.(f) The amount of state funds received by Enterprise
591 Florida, Inc.;
592 6. The amount of state funds allocated to guaranteed loans
593 or surety;
594 7.(g) The number of loan guarantee applications received;
595 8.(h) The number, duration, location, and amount of
596 guarantees made;
597 9.(i) The number and amount of guaranteed loans or surety
598 outstanding, if any;
599 10.(j) The number and amount of guaranteed loans with
600 payments overdue, if any;
601 11.(k) The number and amount of guaranteed loans or surety
602 in default, if any;
603 12. The leverage achieved by a Loan Loss Reserve Fund, if
604 applicable;
605 13.(l) The repayment history of the guaranteed loans or
606 surety made; and
607 14. Demographic and other information as required by
608 Enterprise Florida, Inc.; and
609 15.(m) An evaluation of the program’s ability to meet the
610 financial performance measures and objectives specified in
611 subsection (2) (3).
612 (b) The department shall include in the report required by
613 s. 20.60(10) the annual report provided by Enterprise Florida,
614 Inc., pursuant to paragraph (5)(a).
615 (6)(9) CREDIT OF THE STATE OR ENTERPRISE FLORIDA, INC.—With
616 the exception of funds appropriated to the guarantee program by
617 the Legislature, the credit of the state or Enterprise Florida,
618 Inc., may not be pledged except for funds appropriated by law to
619 the Microfinance Guarantee Program. The state is not liable or
620 obligated in any way for claims on the program or against
621 Enterprise Florida, Inc., or the department. The source of funds
622 available to satisfy the payment obligations of Enterprise
623 Florida, Inc., under the guarantee program is limited to funds
624 available in the guarantee fund.
625 Section 5. Section 288.9936, Florida Statutes, is amended
626 to read:
627 288.9936 Annual report of the Microfinance Loan Program.—
628 (1) The department shall include in the report required by
629 s. 20.60(10) a complete and detailed annual report on the
630 Microfinance Loan Program. The report must include:
631 (a) A comprehensive description of the program, including
632 an evaluation of its application and funding activities,
633 recommendations for change, and identification of any other
634 state programs that overlap with the program;
635 (b) The lenders financial institutions and the public and
636 private organizations and individuals participating in the
637 program;
638 (c) An assessment of the current availability of and access
639 to credit for entrepreneurs and small businesses in this state;
640 (c)(d) A summary of the financial and employment results of
641 the borrowers entities receiving microloans;
642 (d)(e) The number of full-time equivalent jobs created as a
643 result of the microloans and the amount of wages paid to
644 employees in the newly created jobs;
645 (e)(f) The number and location of prospective loan
646 administrators that responded to the department request for
647 proposals;
648 (f)(g) The amount of state funds received by the loan
649 administrator;
650 (g) The amount and source of matching funds used and amount
651 of borrower equity required for each microloan;
652 (h) The number of microloan applications received by the
653 loan administrator;
654 (i) The number, duration, and location of microloans made
655 by the loan administrator, including the aggregate number of
656 microloans made to minority business enterprises if available;
657 (j) The number and amount of microloans outstanding, if
658 any;
659 (k) The number and amount of microloans with payments
660 overdue, if any;
661 (l) The number and amount of microloans in default, if any;
662 (m) The repayment history of the microloans made;
663 (n) The repayment history and performance of funding
664 awards;
665 (o) Demographic and other information as required by
666 Enterprise Florida, Inc.;
667 (p)(o) An evaluation of the program’s ability to meet the
668 financial performance measures and objectives specified in s.
669 288.9934; and
670 (q)(p) A description and evaluation of the technical
671 assistance and business management and development training
672 provided by the network pursuant to its memorandum of
673 understanding with the loan administrator, including the type of
674 training and technical assistance, number of hours of training
675 or technical assistance received, training or technical
676 assistance providers, and other relevant information.
677 (2) The department shall submit the report provided to the
678 department from Enterprise Florida, Inc., pursuant to s.
679 288.9935(8) for inclusion in the department’s annual report
680 required under s. 20.60(10).
681 (2)(3) Enterprise Florida, Inc., The department shall
682 require at least quarterly reports from the loan administrator.
683 The loan administrator’s report must include, at a minimum, the
684 number of microloan applications received, the number of
685 microloans made, the amount and interest rate of each microloan
686 made, the amount of technical assistance or business development
687 and management training provided, the number of full-time
688 equivalent jobs created as a result of the microloans, the
689 amount of wages paid to employees in the newly created jobs, the
690 six-digit North American Industry Classification System (NAICS)
691 code associated with the borrower’s business, and the borrower’s
692 locations.
693 (4) The Office of Program Policy Analysis and Government
694 Accountability shall conduct a study to evaluate the
695 effectiveness and the Office of Economic and Demographic
696 Research shall conduct a study to evaluate the return on
697 investment of the State Small Business Credit Initiative
698 operated in this state pursuant to 12 U.S.C. ss. 5701 et seq.
699 The offices shall each submit a report to the President of the
700 Senate and the Speaker of the House of Representatives by
701 January 1, 2015.
702 Section 6. Section 288.9937, Florida Statutes, is amended
703 to read:
704 288.9937 Evaluation of programs.—The Office of Economic and
705 Demographic Research shall analyze, evaluate, and determine the
706 economic benefits, as defined in s. 288.005, of the first 5 3
707 years of the Microfinance Loan Program and the Microfinance
708 Guarantee Program. The analysis must also evaluate the number of
709 jobs created, the increase or decrease in personal income, and
710 the impact on state gross domestic product from the direct,
711 indirect, and induced effects of the state’s investment. The
712 analysis must also identify any inefficiencies in the programs
713 and provide recommendations for changes to the programs. The
714 office shall submit a report to the President of the Senate and
715 the Speaker of the House of Representatives by January 1, 2020
716 2018. This section expires January 31, 2020 2018.
717 Section 7. This act shall take effect July 1, 2016.