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Community investment group expands mission into Perry County

Since its inception in the early 1990s, the Southeast Mississippi Community Investment Corporation (SEMCIC) has assisted dozens of businesses with gap financing in Forrest and Lamar counties. Now, the non-profit corporation will be bringing that aid to Perry County, as well.

Just this month, the SEMCIC board of directors approved an expansion of its service area into Perry County. Folks in the county, which has no economic and community development of its own, are excited about the new possibilities.

“The expansion of SEMCIC’s service area means great things to come for Perry County,” said Bobby Ray Bolton, president of the Perry County Board of Supervisors. “SEMCIC is an exceptional option available to individuals looking to start a new business or expand an existing one. Residents will be able to take advantage of this opportunity, which will ultimately lead to new jobs, additional taxes and many other facets vital for our county’s growth.”

Offering a boost

The SEMCIC was established in 1993 by several local participating banks and as an initiative of the Area Development Partnership (ADP), a community and economic development organization that serves Forrest, Lamar and Perry counties. The participating banks are AmSouth, BancorpSouth, Great Southern National, Hancock, Regions and Trustmark.

Dedicated to small business development, the SEMCIC targets individuals looking to expand an existing business or start a new one, reaching the non-traditional business loan seekers, which ultimately supports the expansion of job opportunities for low- and moderate-income individuals.

The SEMCIC has historically approved a wide variety of business loans to manufacturers, retailers, restaurants, trucking companies, tax services and childcare facilities throughout the ADP’s service area, and works closely with the Jones County Junior College Small Business Development Center for technical assistance in an effort to assist applicants in preparing the necessary documents for a loan request.

Annie McMillan, senior vice president of community development at the ADP who oversees the SEMCIC, estimated that 40-50 area businesses have utilized the SEMCIC’s aid. Since Perry County is served by the ADP, McMillan said the SEMCIC board of directors saw it as only fitting that its services are offered to those in that county, as well.

How it works

While the SEMCIC has assisted scores of businesses over its 13-year history, the organization is very specific about who it will help and what the funds can be used for. The loan criteria include:

• Equity injection — 5% for minority and micro loans, 10% for business expansions and 20% for business start-ups.

• Ownership of the business must be at least 50%-60%, and owners must be at least two-year residents of Mississippi, except for manufacturers.

• Funds may go toward the purchase or lease of land, building, equipment, inventory and working capital. Working capital cannot exceed 33% of the amount of the total loan or $50,000, whichever is less.

• Funds can be used for fixed assets, start-up costs, interest expense during construction and professional fees. Minority and Mississippi Business Finance Corporation (MBFC) loan funds should not exceed a total loan of $250,000.

• The SEMCIC will finance from three to 15 years depending on the funds’ use. The terms are inventory (three years), working capital (five to seven years), equipment (10 years) and land/building (15 years).

• For minority loans, SEMCIC’s contribution cannot exceed 25% of the project or $250,000, whichever is less. Micro loans are direct loans that are not to exceed $35,000. And with MBFC funds, SEMCIC’s participation cannot exceed 5% of the project and has a maximum limit of $100,000.

• The SEMCIC does not finance creditors who are inadequately secured, speculative land, existing debt, acquisition, improvement or operation of real property held primarily for sale or investment and closing costs (these must be paid by the applicant and generally are 1% of the total loan amount).

How to apply

In order to take advantage of SEMCIC’s assistance, applicants must do the following:

• Pay a $100 non-refundable application fee.

• Have a fully developed business plan that includes all company financial statements, balance sheets and profit-and-loss statements for two years, while new businesses should supply federal income tax returns for the prior two years if financial statements are unavailable.

• Supply projected profit-and-loss statements and cash flow statements for two years.

• Fill out a credit consent form, which is attached to the application, and provide a résumé.

• Provide ownership breakdown, including Social Security numbers and residency information, for each person who holds at least 20% or more of the business.

• Supply personal financial statements on all company officials.

• Provide appraisals for any land and/or buildings involved, and also include legal descriptions, certificate of title and deed of trust.

• Document job creation and retention, as recipients are required to create a minimum of one new job over a two-year time period for each $10,000 loaned.

• List collateral along with current market value. (The SEMCIC accepts liens on machinery and equipment, furniture and fixtures, real property, inventory, personal property and accounts receivable.)

• If applicable, provide a resolution from the company’s board of directors stating that the applicant has permission to borrow money on behalf of the company.

For more information on the SEMCIC, call the ADP at (601) 296-7500, or visit its Web site at http://www.theADP.com/.

Contact MBJ staff writer Wally Northway at northway@msbusiness.com.

About Wally Northway

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