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Commercial Bank
Participation Program
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The Commercial Bank Participation
Program enables lenders:
- Serve the legitimate credit needs of
commercial clients.
- Increase depository relationships
and loan volume.
All loans are reviewed and arranged in
accordance with standard lending policies
and sound banking practices including,
but not limited to, the intended purpose of
the loan, the ability to repay, the business
and its management and the feasibility of
the project.
Qualifying Requirements Use of
Proceeds - STA will arrange a broad range
of loan applications. Desirable loans
include, but are not limited to, the following:
- Business and industrial
acquisitions.
- Construction, conversion,
expansion, repair and
modernization.
- Purchase of land, buildings and
equipment and the repair and
modernization of the machinery
and equipment.
- Start-up and working capital.
- Refinancing an existing loan.
- For any other reasonable business
purpose.
Equity - Each loan is reviewed on its own
merits. The amount of equity required is
evaluated along with all other elements of
the business.
Collateral - Adequate collateral will
generally be required to protect the interest
of each institution. The collateral must be
of such a nature that repayment of a loan
is reasonably assured. Examples of
acceptable collateral may include:
- Accounts receivable and inventory
for short-term loans.
- Machinery and equipment which
have an established market.
- Securities issued by the federal
government or its agencies.
- Letters of credit from acceptable
financial institutions.
- A first mortgage on commercial
real property.
In addition, personal guarantees are
required from the principals with respect to
corporate and partnership borrowings.
Application Process
Lead lender completes application for
participation in a loan. Lead lender is
responsible for servicing of loan.
Interest Rate
The interest rate on the participation
percentage is set in accordance with either
the loan policies for the program or the
current market rate for similar loans. Such
factors as risk, liquidity of collateral, equity
position, repayment and the term of the
loan will all be taken into consideration.
Fees
Commitment fees, origination fees and
service fees may be charged. These fees
will depend upon the loan request and be
reviewed on an individual basis.
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