C2022842_RFP_CommunityLenderLoanLossReserveAccountProgram.docx

RFP [###-####-##] – [RFP title]

ATTACHMENT F - REFERENCE CHECK FORM

Request for Proposals:

Community Lender Loan Loss Reserve Account Program – Round Two

Proposal Due Date: January 23, 2023, at 4:00 p.m. Pacific Time

OBDD RFP no. C2022842 OregonBuys no. S-12300-00005149

Single Point of Contact (“SPC”):

Jon Walton, Contracts Officer Oregon Business Development Department 775 Summer St., NE, Suite 200 Salem, OR 97301-1280 Telephone: 971-600-4902 Email: jon.walton@biz.oregon.gov

GENERAL INFORMATION

INTRODUCTION

This Request for Proposals is a re-opening of previous RFP C2022251, under which the Oregon Business Development Department received eight proposals. The Department wishes to encourage additional lending entities to participate in the programs; additional funds remain available.

The intent of the Community Lender Loan Loss Reserve Account Program (the “Program”) per ORS 285B.780-799 and further defined under OAR chapter 123, division 300 is to make awards to qualified lenders that are unable to access existing Oregon Business Development Department (“Department”) programs. The Program will fund Loan Loss Reserve Accounts for the purpose of increasing the lending capacity of community lenders to Oregon business owners and entrepreneurs who lack access to capital to start or grow their businesses due to factors including, but not limited to:

a. Limited net worth of the Qualified Borrower and its principal(s) guaranteeing the loan;

b. Lack of adequate business and/or personal assets available to pledge as collateral;

c. Limited business and/or personal liquidity normally required to qualify for traditional commercial credit options;

d. Limited time in business and/or credit history; and,

e. Lack of financial training and capacity to prepare and compile business plans, financial statements, and projections necessary to support a business loan request.

This document constitutes a Request for Proposals (“RFP”) for entities (“Proposers”) seeking funding to capitalize a loan loss reserve fund to reduce loan risk and thereby stimulate their lending to Oregon firms.

No more than 10% of the available funds may be awarded to any single qualified lender. The Department shall determine a lender’s eligibility to participate in the Program, based on the submitted proposal and other information the Department may deem necessary to award the $10 million of State of Oregon funding being provided.

Business Oregon anticipates the award of multiple agreements from this RFP. The term of the agreement is 10 years.

Also please see the previous Questions and Answers received on RFP C2022251 for further information, attached below as Appendix 1.

AUTHORITY, OVERVIEW, AND SCOPE

AUTHORITY AND METHOD

The Program is authorized at ORS 285B.780-799 (from 2021 Regular Session HB 2266) and further defined under OAR chapter 123, division 300. The agreements for participation in the Program are not subject to the Oregon Public Contracting Code.

OVERVIEW

Procedure for Enrollment of a Qualified Loan “Qualified Loan” means a loan made, or an operating line of credit extended, by a lender to a qualified business for which the principal losses are reimbursable from moneys in the lender’s Loan Loss Reserve Account if the loan is enrolled by the Department in the Program per OAR chapter 123, division 300:

· A “Qualified Business” or “Qualified Borrower” or “Borrower” means a person that: (a) operates a business in Oregon; or (b) attests to a qualified lender that the person will use proceeds from a qualified loan to establish a business in Oregon.

· A lender may request to enroll a Qualified Loan in the Program by notifying the Department of the Qualified Loan to be enrolled, in a form prescribed by the Department, no less than five (5) business days prior to the lender actually disbursing funds to the Borrower, or the date the loan documents are to be fully executed and the lender is obligated to disburse proceeds, whichever occurs sooner.

· The Department, upon receipt of documentation satisfying OAR 123-300-0080 may authorize the enrollment of the Qualified Loan in writing if the Department is satisfied that the loan is a Qualified Loan; the loan is with a Qualified Borrower or a Qualified Business; and the loan is otherwise in accordance with the lender’s Program proposal accepted by the Department.

· The Department shall, to the extent possible, notify the lender of its enrollment decision within 5 business days from receipt of all documentation required by the Department. Failure of the Department to provide written approval of the enrolled loan does not constitute an approval of, or enrollment of, a loan into the Program. A loan funded in advance of Department approval is made at the sole risk of the Lender, but the Department may approve such a loan for enrollment.

Community Lender, Loan Loss Account, Loan and Reporting Requirements

2.2.2.1 Definition of a Community Lender:

A “Community Lender” means a lender that is a CDFI, Economic Development District, and/or Non-profit lender in Oregon who primarily deploys capital in rural communities, to businesses owned by Socially and Economically Disadvantaged Individuals (“SEDIs”), or businesses located in or with primary operations in SEDI communities. Lenders must have a physical presence in Oregon and intend to participate in the Department’s Loan Loss Reserve Account Program. Lenders are required to have operated for five or more years that meet one or more of the following:

a. Is certified as a CDFI by the Community Development Financial Institution Fund at the United States Department of the Treasury and is a CDFI lending institution that is not a bank, mortgage banking company, trust company, savings bank, credit union, national banking association, federal savings and loan association, federal credit union or other regulated financial institution that accept deposits that maintain an office in this state;

b. Is a nonprofit corporation as defined in ORS 307.130(1)(b);

c. Is an economic development district in Oregon designated by the Economic Development Administration of the United States Department of Commerce;

d. Is an intergovernmental agency formed under ORS Chapter 190;

e. Is a local government as defined in ORS 174.116; or,

f. Is a tribal government as defined by ORS 294.805.

2.2.2.2 Establishing a Loan Loss Reserve Account; State Transfer of Award Funds to Account:

Within 30 days after the Department and lender execute an agreement, the lender and Department shall establish a controlled for-the-benefit-of (“FBO”) Loan Loss Reserve Account in accordance with the Department’s policies. The Loan Loss Reserve Account shall be a segregated account established and maintained with a financial institution, as defined in ORS 706.008. The account must be an interest-earning demand deposit account and only Program award funds, and earnings on the award, and collection recoveries on a defaulted loan may be held in the account unless otherwise agreed to by the Department.

Lender shall confirm in writing to the Department the establishment of the Loan Loss Reserve Account and provide information necessary to facilitate the transfer of award funds to the Account within 30 days after the Department and lender execute an agreement. The Department shall transfer the amount the Department awards to the lender for the Program to the Loan Loss Reserve Account of a lender within 15 business days after the lender provided notice.

2.2.2.3 Establishing a Loan Loss Reserve Account; State Transfer of Award Funds to Account:

Ownership of the Loan Loss Reserve Account shall be attributed to the lender’s EIN (tax ID). The Department must have sole control of the Loan Loss Reserve Account. The agreement between Department and lender will prescribe payments to the lender from a Loan Loss Reserve Account approved Enrolled Loan Losses (or upon release of a lender from an Agreement).

Until such time that a lender achieves all the requirements and is released from their obligations under the Agreement, the balance of all moneys in the lender’s Loan Loss Reserve Account are subject to return and repayment to the State of Oregon. Any earnings on the balance in a Loan Loss Reserve Account are subject to the same restrictions.

2.2.2.4 Enrollment of a Loan in the Program:

A lender may apply to the Department to enroll a Qualified Loan in the Program. The Department, at its sole discretion will determine whether a loan is eligible and meets all the requirements for enrollment.

A Qualified Loan does not mean a loan:

With a variable interest rate;

With an origination fee that exceeds 1.5%, and with an annual interest rate that exceeds the lesser of 18% or the Prime Rate plus 7%;

With an origination fee that is equal to or exceeds 1.5%;

With an annual interest rate that exceeds the lesser of 18% or the Bank Short-Term Rate plus 7%;

That results in more than $250,000 being enrolled into the Program for any business, or any affiliates or subsidiaries of a business;

For working capital with a term exceeding seven years;

For working capital with an amortization exceeding seven years;

For capital assets with a term exceeding the useful life of the assets;

For capital assets with amortization exceeding the useful life of the assets;

For the purchase of real property that is not used for the business operations of the Borrower;

For the purchase of owner-occupied residential housing;

For the construction, improvement or purchase of residential housing that is owned, or to be owned, by the principal or their immediate family members.

For the purchase of securities;

For the purpose of lobbying activities;

For the purpose of repayment of delinquent federal, state, county or other local government taxes; and,

· That includes, in whole or part:

· The refinancing of an existing loan made by the Qualified Lender to the Borrower;

· The refinancing of an existing loan enrolled in another state or federal credit enhancement or credit insurance program;

· The refinancing of an existing personal loan not used for business purposes;

· Reimbursement of funds owed to any owner, including funds to repay any equity injection or injection of capital for the business’ continuance;

The principals of a Qualified Borrower may not be:

· An executive officer, director, or principal shareholder of the lender;

· A member of the immediate family of an executive officer, director or principal shareholder of the lender;

· A person with a related interest to any of the persons described in herein; or,

· Delinquent on federal, state or local taxes. A business that has entered into, and is current on, a repayment agreement with the applicable taxing authority is not considered to be delinquent.

The Qualified Borrower and the activities of their business must be compliant with all federal, state or local laws.

2.2.2.5 Relationships and Publicity:

The lender must establish relationships with a wide range of qualified small businesses and technical assistance providers to ensure that loan candidates are aware of the Program and that it can attract a wide range of qualified applicants. This includes outreach to SEDIs as defined by U.S. Treasury SSBCI guidelines.

2.2.2.6 Transactions:

Lender must structure and negotiate loan transactions that comply with the OAR chapter 123, division 300, including legal and reporting documentation.

2.2.2.7 Conflicts of Interest:

Lender must establish practices based on Program guidelines to uncover and avoid potential conflicts of interest.

2.2.2.8 Reporting:

Lender must provide annual reports on Program activities in accordance with the following Program requirements:

(1) No later than July 31 of each year, a lender shall provide an annual report in a form prescribed by the Department, for the period beginning July 1 of the immediate proceeding year and ending on June 30 of the current year.

(2) The annual report shall include, but is not limited to, the following information:

a. The annual and cumulative number and principal amount of all Enrolled Loans made by the lender.

b. The current principal balance of each Qualified Loan enrolled in the Program.

c. For each Enrolled Loan, the following information:

i. The amount of the project;

ii. The term and amortization of the loan;

iii. The purpose of the loan; and,

iv. The source and amount of other capital in the project.

d. The number of loans that were declined, the amounts of the declined loans and the primary reasons for the declines.

e. The number and amount of non-performing Enrolled Loans.

f. Any other information required in the reporting form by the Department.

(3) For its Qualified Borrowers or Qualified Businesses, the annual report shall include:

a. The NAICS code of the operating entity.

b. The primary city and county in which the operating entity conducts business.

c. The city and county in which the loan proceeds were used.

d. The Annual income of the business.

e. Voluntarily reported demographic data requested by the Department, including, but not limited to, whether a Qualified Business is owned by a woman, a minority individual, a veteran of any branch of the Armed Forces of the United States, the National Guard or other reserve component, a low-income person or a person operating the business in a rural area of this state.

f. The Business Identification Number provided by the Oregon Employment Department and the corresponding:

i. Number of individuals employed by the Qualified Borrower or the Qualified Business at the time of application; and,

ii. The number of fulltime jobs projected by the Qualified Borrower or Qualified Business to be created and/or retained as a result of the Enrolled Loan.

g. The principal balance of each Enrolled Loan that was delinquent during the reporting period.

h. The principal balance of each Enrolled Loan that is/was in default during the reporting period.

i. The number and amount of claims submitted.

j. The number and amount of claims approved by the Department.

k. The amount of recoveries received subsequent to payment of a claim from the Loan Loss Reserve Account.

(4) With respect to the lender, the annual report shall include:

a. An annual financial report of the lender.

b. A copy of the last fiscal year audit of the lender.

c. A summary of outreach conducted by the lender to SEDIs and SEDI-owned businesses.

d. A summary of all referrals made to other federal, state, regional or local capital and/or technical assistance providers.

e. A summary of all projects co-funded with other federal, state, regional or local capital and/or technical assistance providers.

f. A summary of aggregate business lending activity within Oregon not enrolled in the Program including aggregately reported demographic data voluntarily provided by the recipients.

1. A final report is due to the Department not later than 45 days after the termination of the Agreement. The final report shall be submitted in a form acceptable to the Department and shall include, but may not be limited to:

0. The total number and total dollar amount of Enrolled Loans;

0. The average interest rate, term and amount of Enrolled Loans;

0. The cities and counties in which Borrowers primarily used the loan proceeds;

0. The total number and total dollar amount of approved claims;

0. The aggregate performance of Enrolled Loans; and

0. The aggregate demographic data for Enrolled Loans.

2.2.2.9 Compliance:

Lender must work with Department to establish any other reporting mechanisms, audits, and other internal controls and compliance activities to enable compliance with the Program.

Claims, Recovery and Reimbursement from Loan Loss Reserve Account

2.2.3.1 Procedure for Making Claim for Reimbursement of Loss & Prioritization of Recovered Proceeds:

A lender shall notify the Department within 30 days of a default on an Enrolled Loan. If the Borrower is unable to cure the default and the lender anticipates writing off all or a portion of the outstanding loan balance at the time of default, the lender must submit a liquidation plan for Department review and approval prior to the Borrower or the lender liquidating any assets, unless otherwise authorized in writing by the Department. The liquidation plan for the defaulted Enrolled Loan shall be in a form prescribed by the Department which shall include, but may not be limited to:

· A copy of the lender’s credit approval memo and supporting documentation of the loan;

· Personal financial statement(s) for the Borrower’s principal(s);

· Itemization of all business and personal assets including, but not limited to, real estate, equipment and other chattel, accounts receivable, inventory, and intellectual property securing the loan. The inventory of assets shall include information on the status of the lender’s liens, current priority of lien positions on personal and business assets, current retail valuations of the assets, and anticipated discount of the assets for liquidation.

· A written explanation describing reason(s) the pledges or security is otherwise forfeit, worthless or undiscoverable; and,

· A written explanation describing the extent to which the lender has attempted to exercise its right to recover its Loss with each respective pledge or security.

The lender shall execute the Department-approved liquidation plan for an Enrolled Loan in default and liquidate the Borrower’s and the principal’s assets as applicable and provided as collateral in the lender’s loan approval. As required by the Agreement, should a Borrower fail to cooperate in the liquidation of assets, the lender shall exhaust all other lawful remedies against the Borrower and its principal(s) to recover and liquidate assets pledged as security, including but not limited to realization of claims on their personal or other financial guarantees or from other applicable sources.

If a lender anticipates writing off all or part of an Enrolled Loan as a result of a Borrower’s default, the lender may make a claim for all or part of the loss incurred by the Enrolled Loan in default by submitting a claim in a form prescribed by the Department for the Department’s review and approval.

All proceeds recovered by the lender as part of liquidation process for a loan in default shall first be applied to the outstanding principal balance of the loan. After full repayment of the principal balance, the lender may apply any other recovered proceeds to interest, late fees and legal costs at the lender’s sole discretion.

The Department shall review a claim for a loss on an Enrolled Loan to determine if the lender has met the requirements of the Agreement and the rules. The Department may reduce or deny a Claim, in whole or in part, at its sole discretion, if the Department determines in its review of the lender’s administration of the Enrolled Loan that the lender failed to take action, consistent with these rules, the Agreement, the approved liquidation plan, and prudent business lending practices, to:

· Appropriately secure personal or business assets during the maintenance period of the loan; or,

· Work with the Borrower to liquidate the assets pledged as security for the Enrolled Loan in a reasonable and orderly manner.

Only upon the Department’s approval of a claim may the lender recover the outstanding principal balance of the loan from the lender’s Loan Loss Reserve Account or other amount as reduced by the Department in its approval of the claim. Upon approval of a claim, the Department shall prepare a written authorization for the financial institution maintaining the Loan Loss Reserve Account to disburse the approved claim amount to the lender.

Notwithstanding the requirements above, upon request of a lender the Department may waive the lender’s collection obligation to pursue its rights against the personal or other financial guarantees of the principals(s) and exhaust all lawful remedies if the Agreement conditions have otherwise been met and the following conditions have been met to the satisfaction of the Department:

· The original amount of the Enrolled Loan was $25,000 or less; and

· The Borrower and all principals of the Borrower, including but not limited to all individually and jointly held assets, had a personal net worth not greater than $75,000 at both the time of application and the time of default.

A lender that does not comply with ORS 285B.791(2)(d), ORS 285B.791(3)(a), or OAR chapter 123, division 300 shall be considered to have breached the Agreement.

2.2.3.2 Reimbursement of Claims from Loan Loss Reserve Account:

The Department shall approve a lender’s claim to reimburse the lender for Loss on an Enrolled Loan in default pursuant to the process and requirements described in the OAR chapter, 123 division 300.

The Department shall reject a claim if the Department determines that the:

· Lender has not completed required liquidation of the Borrower’s assets, realization of claims against the personal or financial guarantees on the Enrolled Loan, or realization of other sources as applicable; or

· Representations and warranties provided by the lender at the time of enrollment of the Qualified Loan, in the liquidation plan, or at the time of a claim for reimbursement were false.

The liability of the State of Oregon and the Department under the Agreement is limited to the amount of moneys awarded and credited to the lender’s Loan Loss Reserve Account. All moneys awarded and credited to the lender’s Loan Loss Reserve Account, including all interest earnings shall be available to pay approved loss claims.

When there are insufficient funds in the Loan Loss Reserve Account to cover the total amount of an approved Loss Claim, the Department shall authorize a reimbursement limited to the balance of the Loan Loss Reserve Account. Such a limited reimbursement shall fully satisfy the Claim and the lender will have no further rights to receive any other amount with respect to the Claim.

The Department shall review loss claims in the order it receives them. If a lender files two or more loss claims simultaneously and there are insufficient funds in the Loan Loss Reserve Account to pay them, then the lender may designate the order the loss claims are to be processed by the Department.

Loan Loss Reserve Accounts without a balance shall be closed and the lender shall be required to continue reporting in compliance with its Agreement and OAR chapter 123, division 300.

PROPOSAL REQUIREMENTS

0. ELECTRONIC RESPONSES BY EMAIL ONLY

Only electronic proposals sent by email are acceptable. Proposals sent by fax, regular mail, and or physical deliveries are not acceptable. The email subject or reference line for all submittals should include the RFP title and RFP number.

Proposals will be received only at the SPC’s email address.

NO LATE OR MISDIRECTED SUBMISSION OF PROPOSALS

Submittals that are late or misdirected will be considered non-responsive and rejected, without exception. The Department is not responsible for errors of any kind involved with electronic submission, nor for notifying Proposers of complete or incomplete receipt of a proposal.

FORMAT AND PAGE LIMIT FOR PROPOSALS

The proposal must be organized in the same manner as Section 4. The Department will accept proposals in electronic files compatible with Microsoft Office applications. Files that are more than 15 megabytes must be submitted incrementally. Proposals must not be submitted as .zip, .exe or .com files.

Proposers may choose how to allocate pages between any sections, within the overall page limit. The proposal must not exceed 20 pages total (excluding Key Person Resumes, Cover Sheet and Certifications (Attachment A), and the References Check Form (Attachment B)). Department will consider the pages up to that allowable number and discard all pages in excess of the allowable number. One (1) page is defined as: one side of a single 8-1/2” x 11” page, with 12-point minimum font size for the substantive text. Proposers may use their discretion for the font size of other materials (e.g., graphics, charts). Any page or partial page with substantive text, graphics, charts, resumes, etc., will be counted as one (1) page.

COVER SHEET AND CERTIFICATIONS (ATTACHMENT A)

Proposers must complete and submit a signed Cover Sheet and Certifications (Attachment A) as a PDF file. The Cover Sheet and Certifications must be signed by a duly authorized representative of the Proposer empowered to bind the Proposer.

REFERENCES (ATTACHMENT B)

Proposer must provide three references for similar services or projects performed. If possible, use references that align with intent of the Program. References must be able to verify the quality of previous, related work. Ensure at least one reference is an investor or capital provider to the lender; one received a small business loan from the lender; and one can speak to your impact on economic development.

References will not be scored; they will be used as part of Department’s due diligence responsibility determination. Department may determine if provided references support Proposer’s ability to successfully perform the intended agreement. Department may use references to obtain additional information, or verify any information needed. Department may contact any reference (submitted or not) to verify Proposer’s ability to perform.

substance of PROPOSAL AND MAXIMUM SCORING To be considered for evaluation, proposals must contain each of the following:

PROPOSER’S EXPERIENCE & DEAL FLOW Up to 50 points Please describe the following:

Qualifications, including full chronological resumes of principals, expected organizational chart for the fund, including board, advisors, and staff.

Experience lending to Oregon startups and small businesses.

Experience and sophistication in reporting to government agencies.

Description of current reputation both locally and nationally.

Regarding historical and projected deal flow in Oregon:

· The number of loans closed to Oregon based businesses, the value of Oregon loans closed, and the value of the total project costs annually for the 5-year period preceding the submission of the lender’s proposal;

· Historical performance of loans made by the lender;

· The projected loan production and portfolio performance, including assumptions for the projections, over the 10-year period of the award;

· How the lender proposes to increase the accessibility of capital for SEDIs and SEDI-owned businesses through its outreach, application process, underwriting criteria and lending terms that are designed to reduce historic barriers to capital;

· How the Proposer proposes to provide, or collaborate with providers of, technical assistance and financial literacy services to SEDIs and SEDI-owned businesses;

· How the Proposer’s service area and loans made under the program will support regionally diverse and rural areas of this state;

· How the Proposer’s assistance will create a path for Borrowers to graduate to traditional, low-cost forms of private capital through partnerships with, and utilization of, programs administered by Department, federal agencies and private financial institutions as defined by ORS 706.008;

· The Proposer’s overall financial health. including the viability of the Proposer and the Proposer’s business lending portfolio(s).

STRATEGY AND OPERATING MODEL Up to 50 points Please describe the following:

The underwriting standards, loan loss provisions, loan terms and conditions the Proposer proposes to use when evaluating and establishing a reasonable determination of the Borrower’s ability to service the debt and repay the loan obligation;

The Proposer’s proposed standard documentation requirements for Enrolled Loans, including information on default provisions;

The Proposer’s plans and strategies to maintain a self-sustaining loan loss reserve account necessary to continue to increase the accessibility of capital for Oregon businesses, including SEDIs and SEDI-owned businesses, through small business loans;

Expected private financing leverage from the loans enrolled against the loan loss reserve for the duration of the grant agreement maintenance period;

Expected range of investment size and structure. Please include minimum and maximum loan amounts, and type of uses for loan proceeds (e.g., working capital, operating lines of credit, equipment loans, real estate loans, improvements, priority lien positions, subordinated debt, etc.).

Expected services the Proposer will provide to support loan recipients.

Expected requirements or restrictions for loan recipients.

Expected limitations on use of loan proceeds.

Expected process for negotiating and approving loan terms.

Expected process for determining and documenting the “cause and result” of private capital leverage related to the investment.

Expected process for monitoring compliance and performance of outstanding loans.

Expected process for addressing delinquencies, defaults and collections.

Expected plan for attracting lendable companies including how the Fund will reach out to SEDI-owned businesses.

Provide a statement describing the expected benefits of the proposed fund to the state, its businesses, and its residents including the extent to which the resulting small business loans will expand economic opportunities and promote economic development in Oregon.

A description of the internal accounting and administrative controls systems of the Program and the extent to which such systems can provide reasonable assurance that the State of Oregon funds will be safeguarded against waste, loss, unauthorized use, and misappropriation. For example, provide evidence of one or more of the following:

· Periodic internal audits;

· Annual independent audits;

· Program financial statements current within the past year; and/or,

· Adequate accounting and financial management systems.

A statement attesting that the Proposer has read OAR chapter 123, division 300 and is committed to operating the Program in accordance with all federal and state laws, rules and guidelines (see attached).

SOLICITATION PROCESS

PUBLIC NOTICE

The RFP and attachments are published in the OregonBuys eProcurement System at www.oregonbuys.gov/bso. In addition, the Department may provide the RFP and attachments directly to potential firm Proposers.

Modifications, if any, to this RFP will be made by written addenda and published in OregonBuys. Department may but is not responsible for sending addenda to any solicited firms. Prospective Proposers are solely responsible for checking OregonBuys to determine whether any addenda have been issued. Addenda are incorporated into the RFP by this reference.

QUESTIONS AND CLARIFICATIONS

The SPC for this RFP is identified on the Cover Page, along with the SPC’s contact information. All inquiries, whether relating to the RFP process, administration, deadlines, award, or to the intent or technical aspects of the services must be submitted in writing (email preferred; mail or fax are acceptable) to the SPC. All inquiries should reference the RFP number; identify Proposer’s name and contact information; and refer to the specific area of the RFP being questioned (i.e., page, section, and paragraph number if applicable).

All questions must be received no later than (7) calendar days prior to the proposal due date specified on the title page of this RFP.

Substantive questions and answers will be issued as official addenda to this RFP. Changes or modifications to this RFP shall be binding on Department only if in the form of written addenda issued by Department.

The Department will provide addenda by posting them to OregonBuys. In addition, the Department may provide addenda to directly solicited firms. Anyone who has received a copy of this RFP from a source other than Department is responsible for checking with the SPC designated procurement staff or online postings. Department is not responsible for sending addenda to any unknown potential Proposers.

Department may require any clarification it needs to understand a proposal.

PROTESTS OR SUGGESTIONS FOR THE RFP

Proposers who believe RFP specifications are unnecessarily restrictive or limit competition or who recommend significant improvements may submit a “protest” to the SPC. Protests concerning the RFP, including requests to change provisions or specifications must be submitted in writing to the SPC not later than (7) calendar days prior to the proposal due date specified on the cover page of this RFP. A protest must clearly, specifically and in detail explain the reason(s) for the protest and specify any proposed changes to the RFP specifications. Department will respond to protests in writing. Department will not consider any solicitation protest submitted after the deadline established in this subsection.

EVALUATION PROCESS

SCORING EVALUATION

Each proposal meeting all responsiveness requirements will be independently evaluated by members of an Evaluation Committee.

NEXT STEPS DETERMINATION

At the conclusion of a round of competition, Department may choose to conduct additional round(s) of competition if in the best interest of the State. Additional rounds of competition may consist of, but will not be limited to:

Interviews Presentations/Demonstrations/Additional Submittal Items After reviewing and evaluating proposals, the Department shall reject or accept proposals and determine the award amount for each accepted proposal from eligible lenders.

The Department may make a conditional award to an eligible lender, subject to modifications to the lender’s proposal and the Departments’ acceptance of the amended proposal for the lender to meet the evaluation criteria.

As soon as practicable after the awards are finalized, the Department shall notify the lenders that submitted proposals for the RFP of the results and offer the awards to the lenders whose Program proposals are accepted.

A lender shall accept a Program award offer by timely entering into an Agreement for a Program award with the Department as described in OAR 123-300-0400 within 90 days of the award. After 90 days, an award will be rescinded and may be reallocated, at the Department’s sole discretion, to other qualified lenders from the RFP.

AWARD REQUIREMENTS

TAXPAYER IDENTIFICATION NUMBER

The apparent successful Proposers shall provide its Taxpayer Identification Number (TIN) and backup withholding status on a completed W-9 form when requested by Department or when the backup withholding status or any other relevant information of Proposer has changed since the last submitted W-9 form, if any.

BUSINESS REGISTRY

If selected for award, Proposer must be duly authorized by the State of Oregon to transact business in the State of Oregon before executing the Agreement. Information about these requirements may be found at http://sos.oregon.gov/business/pages/register.aspx.

ADDITIONAL INFORMATION

PUBLIC RECORDS

This RFP, and one copy of every proposal accepted in response to it, will be kept by Department and made a part of its records. All accepted proposals will become part of the public file without obligation to Department. If a proposal contains any information that may be exempt from disclosure under the Oregon Public Records Law, ORS 192.311 through 192.431, the proposer must clearly designate that portion of its proposal it considers to be exempt, along with a justification and citation to the authority relied upon. Application of the Uniform Trade Secrets Act (UTSA), ORS 646.461 and 646.475, and the Oregon Public Records Law will determine whether any information is exempt from disclosure. Identifying an entire proposal as exempt from disclosure is not acceptable and will not be effective to exempt the proposal or any part of it from disclosure. Failure to identify the portion of the proposal claimed as exempt from disclosure, and to specify a justification and the authority relied upon, will be deemed a waiver of any future claim based on disclosure of that information.

COST OF SUBMITTING A PROPOSAL

Proposer shall pay all the costs in submitting its proposal, including, but not limited to, the costs to prepare and submit the proposal, costs of samples and other supporting materials, costs to participate in demonstrations, or costs associated with protests.

RFP ATTACHMENT A - COVER SHEET & CERTIFICATIONS

STATEMENT OF PROPOSAL to Oregon Business Development Department __________________________________________ (Legal Name of Proposer) |_| Corporation |_| Professional Corporation |_| Partnership |_| Limited Partnership |_| Ltd. Liability Company |_| Ltd. Liability Partnership |_| Sole Proprietorship |_| Other __________ Mailing Address

Type name of contact/authorized representative Email address Telephone Other Type name of person(s) authorized to sign contract Affirmative Action, Nondiscrimination: Department is an equal-employment-opportunity employer and values diversity in its work force. It also requires proposers to have an operating policy as an equal employment opportunity employer, and to follow good faith diversity efforts when subcontracting.

We certify that we have a formal statement of nondiscrimination in employment policy and have an affirmative action program if over 50 employees. (Firms of 50 people or less do not need a formal program but must have a policy). Does your firm have 50 or more employees? |_| Yes |_| No We certify that we do not discriminate on the ground of race, color, religion, national origin, and sex (including sexual orientation and gender identity), in the provision of the goods, services, facilities, privileges, and accommodations of any financial institution, as defined in 12 U.S.C. 5462.

|_| Yes |_| No Responsibility Certifications Has your entity ever been declared in breach of any contract to provide services for unperformed or defective work?

|_| Yes |_| No If “yes,” explain.

Has any employee or agent of your entity been convicted under state or federal law of embezzlement, theft, forgery, bribery, falsification, or destruction of records, receiving stolen property or any other offense indicating a lack of business integrity or business honesty?

|_| Yes |_| No If “yes,” explain.

Has your entity or any employee or agent been indicted under state or federal false claims or antitrust laws, or charged with any other criminal offense related to lending laws or arising out of obtaining, attempting to obtain, or performing a public or private contract or subcontract? |_| Yes |_| No If “yes,” explain.

During the last ten years, has your entity changed majority ownership or been the debtor in a bankruptcy case? |_| Yes |_| No If “yes,” explain.

Does your entity have any outstanding judgments pending against it? |_| Yes |_| No If “yes,” explain.

During the last ten years, has your entity been a party to litigation, arbitration, or mediation where the amount in dispute exceeded $10,000? |_| Yes |_| No If “yes,” explain. (Include court, and party names.)

Conflicts of Interest: Please select (only) one of the following three options:

Tax Information and Tax Compliance: Any individual signing on behalf of the Proposer hereby certifies under penalty of perjury: (a) Proposer’s correct taxpayer identification number is [ ___________]; (b) Proposer is not subject to backup withholding because (i) Proposer is exempt from backup withholding, (ii) Proposer has not been notified by the IRS that Proposer is subject to backup withholding as a result of a failure to report all interest or dividends, or (iii) the IRS has notified Proposer that Proposer is no longer subject to backup withholding; (c) s/he is authorized to act on behalf of Proposer, s/he has authority and knowledge regarding Proposer’s payment of taxes, and to the best of her/his knowledge, for a period of no fewer than six calendar years preceding the Effective Date of this contract, Proposer has faithfully has complied with and is not in violation of: (i) all tax laws of this state, including but not limited to those included in: ORS 320.005 to 320.150 and 403.200 to 403.250 and ORS chapters 118, 314, 316, 317, 318, 321 and 323 and local taxes administered by the Department of Revenue; (ii) any tax provisions imposed by a political subdivision of this state that applied to Proposer, to Proposer’s property, operations, receipts, or income, or to Proposer’s performance of or compensation for any work performed by Proposer; (iii) any tax provisions imposed by a political subdivision of this state that applied to Proposer, or to goods, services, or property, whether tangible or intangible, provided by Proposer; and (iv) any rules, regulations, charter provisions, or ordinances that implemented or enforced any of the foregoing tax laws or provisions; and (v) in the event that Proposer is a general partnership or joint venture, that Proposer signature(s) on this Cover Sheet constitute certifications to the above statements pertaining to the partnership or joint venture, as well as certifications of the above statements as to any general partner or joint venturer.

Signature of Authorized Representative certifying the truth of all statements:

[signature]

RFP ATTACHMENT B - LIST OF REFERENCES

Department may check to determine whether these references support Proposer’s ability to comply with the requirements of this RFP. Department may use references to obtain additional information, or verify any information needed. Department may contact any reference (submitted or not) to verify Proposer’s qualifications.

Proposer must provide at least three references from current or former client for similar projects performed. References must be able to verify the quality of that related work.

1. Reference Entity Name: __________________________________________

2. Reference Entity Name: __________________________________________

3. Reference Entity Name: __________________________________________

Appendix 1 Questions and Answers regarding the Community Lender Loan Loss Reserve Account Program

The Oregon Business Development Department (Department or Business Oregon) has received several questions regarding the Loan Loss Reserve Account Program, and this addendum serves to answer the questions received to date. None of the answers in this appendix modify or add to the directions in the RFP document but may provide useful information for drafting a proposal. Thank you for your interest in this program.

Question 1: On the loan loss reserve program, what is the minimum award that Business Oregon is contemplating for the program?

Answer 1: By statute no single recipient may receive more than 10% ($1 million) of funding through the Loan Loss Reserve program but the statute does not establish a floor. Until all proposals are accepted, it isn’t possible to determine what the minimum would be. Awards will be determined in part based on the total number of accepted proposals and the anticipated outcomes (e.g. projected # and $ of loans, $ loaned as a result of the LLR account over 10 years, collaboration with other lenders, maturity of existing programs, ability to reach targeted recipients, etc.) The Department is making provisional awards, and those amounts will not be reduced under any circumstance. Once all proposals have been accepted, the provisional awards may be increased during negotiation with each proposer.

Question 2: Is Business Oregon going to award a certain amount of funding for entities involved in the program and then we go through the enrollment/approval process for a specific loan? Is there a specific amount of "reserve" that will be available for each enrolled/approved loan?

Answer 2: As in the previous answer, by statute no single recipient may receive more than 10% ($1 million) of funding through the Loan Loss Reserve program but the statute does not establish a floor. Until the RFPs close, it isn’t possible to determine what the minimum would be. Awards will be determined in part based on the total number of accepted proposals and the anticipated outcomes (e.g. projected # and $ of loans, $ loaned as a result of the LLR account over 10 years, collaboration with other lenders, maturity of existing programs, ability to reach targeted recipients, etc.)

As an example, Business Oregon receives 18 accepted proposals requesting $15 million in loan loss reserve funding (the program has been allocated $10 million of funding). After review of the proposals, due to funding limitations, Business Oregon will make 18 awards based on the projections and lending history of the recipients and the anticipate outcomes, awards range between $350,000 and $800,000 with the average award being about $550,000.

There will be a very brief application to enroll a loan where the department will primarily be looking at the loan eligibility consistent with the program rules. Once approved, the loan may close and the LLR is available in the event of a default after collections are completed. The reserve may be used at the sole discretion of the lender (e.g. may enroll the entire balance, the unsecured/uncollateralized portion of the loan, etc.). The lender should describe their approach to using the LLR in their proposal. By enrolling a portion of a loan, the LLR will help leverage more capital than if a lender is enrolling entire loans. If a lender currently has a LLR, the lender could start with their existing LLR policy to simplify the process.

Question 3: We have a couple of loan programs where we don’t require collateral, other than a blanket UCC filing or specific one on any equipment purchased with our loan funds. We don’t ask for real estate collateral. Does this put us at any disadvantage if we apply for the program?

Answer 3: Lending programs that do not follow prudent lending standards will be at a disadvantage to those that do. The purpose of these programs is to help borrowers graduate to low cost private financing. As such, lenders terms and conditions for the Relender and LLR programs, including collateralization of loans, is expected to be similar to private sector lending collateral and security requirements. If the assets being financed are not sufficient to repay the loan in the event of a default, prudent lending and underwriting standards would then encumber other available business and/or personal assets, including commercial and personal real estate, necessary to secure the loan. We will work with lenders as necessary as to what is appropriate for each loan. If there are no other assets available and the lender has secured its loan through a blanket UCC and personal guarantees from the principals, those projects will likely be eligible provided they meet all other program requirements. On real estate, the presence of one or more senior liens does not preclude the property from being considered to be available for the loan at issue.

Question 4: Presuming the $10M in LLR funds are available on a first-come, first-served basis, how will participating lenders be able to monitor the balance of available funding? Will Business Oregon provide real-time access to this information, or will it be published at a regular and specific frequency?

Answer 4: LLR funds are not available on a first-come-first-serve basis. The Department will award the entire $10 million of funding to those that submit successful proposals and the award amount will be established in the contracts. For example, Lender A is awarded $650,000 for their LLR and the proceeds will be deposited into a financial institution as stipulated in the program rule and RFP; Lender B is awarded $500,000; Lender C is awarded $900,000, etc.

Question 5: Once funding has been allocated to a participating lender for enrolled loans, no other participating lender can access those funds, correct? They are deposited into the individual participating lenders LLR Account for claims on eligible enrolled loans of that participating lender, correct?

Answer 5: Both assumptions are correct but the LLR account must be separate and distinct from any other LLR assets the lender may have.

Question 6: Will 100% of the enrolled loan amount be funded to the Loan Loss Reserve Account? For example, let’s say a participating lender makes a $200,000 loan, which is approved by Business Oregon and enrolled into the program – will Business Oregon deposit $200,000 into the LLR Account?

Answer 6: The entire award will be deposited into a controlled account as detailed in rule and the lender will have conditional access to the entire LLR balance for loans that are approved to be enrolled against the LLR.

Question 7: Will the participating lender be able to make claims on the $200,000 for any enrolled loan in the program?

Answer 7: The lender will be able to access the entire balance of the LLR for enrolled loans for which claims are made against the LLR.

Question 8: Once funding has been expended, or the participating lender reaches the maximum 10% threshold, may the participating lender continue to enroll additional eligible loans into the program?

Answer 8: Lenders are expected to provide financial modeling as to how they intend to leverage the LLR during the contract.