Biorefining Loan Opportunity

Regulation

Applications are being accepted as funds are made available by the Bio-refinery Renewable Chemical and Bio-based Product Manufacturing Assistance Program.  The program’s goal is to fund the construction, development, and retrofitting of commercial scale, processing and manufacturing equipment dependent, end-user producing bio-refineries.  Applicants are encouraged to consider projects located in rural communities as it is worth some additional points in the competitive point review system that the applications will go through.  The agency has another goal in separate programs to build sustainable economies in rural communities by providing investments in infrastructure, partnerships, and innovative development.
The programs stated purpose is to assist in the development of technologies used in the development of advanced bio-fuels, renewable chemicals, and bio-based product manufacturing, the strategy described to achieve this goal includes the availability of loans for construction, development, retrofitting of bio-refineries on the commercial scale.

Point System

The receiver of any loan will be judged by a point system based on criteria relevant to the borrowers function as a biorefinery.  We cover some of the criteria that the lenders will be awarded points on, in the rest of the following section.  For Biobased Product Manufacturers the degree of commitment of contracted sale agreements, the duration of these contracts, the financial strength of the other parties which the biorefinery manufacturer’s agreements are with.

How are Borrowers Graded

The loans are given based on factors that encourage goals of the program.  Whether the borrow of a biobased product manufacturer has established a market for their product is important for a successful biorefinery operation.  Manufacturers are encouraged to have signed purchase contracts or other type of agreements for more than half of the dollar value of the product.  Whether the facility is the only one within its location will be the difference of extra points or zero for this section.  Future proposal of other biobased outputs not previously used in the manufacturing of biobased products will also yield more points for the borrower’s consideration.  Points are rewarded based on the percentage that producer associations or cooperatives supply the borrower.  The applicants will be awarded points based on the borrower’s financial participation with the most points being given to those with requested loan amounts less than or equal to 50 percent of the eligible project costs, but percentages up to 70, still being able to receive points.  If the borrower establishes that the manufacturing process being adopted will have a positive effect on resource conservation, public health, or the environment; points will be awarded based on what is provided by the borrower to prove or disprove these facts.  If the borrower establishes that no negative impacts on the economy or existing manufacturing plants or other relevant facilities will arise out of the proposed adoptable technology.  The potential for rural economic development will add points in favor of borrower.    Local owners of the facility proposed in the application will receive a small amount of additional points.  Projects which are replicable on the regional or national level.  The administrator of the considerations can award an additional 10 points.

Program Info

The Program has 5 steps of operation.  Loan Origination inspects applied lenders for compliance with provisions, loan processing is where the Agency processes the loans, Evaluation of Applications and Awards where on a competitive basis; borrowers will be chosen.  The last 2 processes round out with Guaranteed Loan Servicing where the loans that are guaranteed under the specified notice will be serviced.  The last step is to be registered with the System for Award Management and DUNS Registration; any applicant and active award needs to be registered with up to date information, until the award is no longer active.
The Program has two phases, the first where applications are used to determine lender, borrower, and project eligibility, economic and technical feasibility of the proposal is determined and a priority score is provided to the proposal.  Applicants with the highest priority scores move on from phase 1 applications to phase 2 applications.  Phase 2 application materials can be available alongside the project planning and engineering reviews, environmental compliance information, technical report, financial model, and credit evaluation by the lender.

How is This An Opportunity?

Loans and Grants are an opportunity for good cash flow for a business.  The government from time to time will make funds available to businesses who can move national interests forward.  Entrepreneurs should keep an eye open on these kind of opportunities.

We start from modest beginnings but continue to identify, develop, and research opportunity and strategy for entrepreneurs, to better develop business ideas.

 

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