ET2000

The ET 2000 New Business Development Program and the Community Reuse Organization of East Tennessee (CROET) Small Business Development Program comprises a comprehensive business assistance network managed by CROET. In accordance with the ET 2000, Economic Development Plan, and the ET 2001, Implementing the Vision proposal, these programs are designed to, strengthen and expand the existing technology transfer, small business development efforts, and incubation programs in the region. The goal is to generate investment and employment that will reduce the effects of the Federal defense industry downsizing on the regional economy. The regional Stakeholders who conceived the ET 2000 and ET 2001 Plans recognized that the creation and expansion of small business, and particularly technology-oriented ventures utilizing the world-class talent and resources unique to East Tennessee, would continue to be the region's best opportunity to retain and increase its high-quality employment base. The Financial Assistance Fund functions as an integral component of the ET 2000 New Business Development Program to leverage critical start-up and expansion capital for regional business ventures.

TARGET MARKETS
The funding targets small- and medium-sized businesses engaged in activities such as manufacturing a product or providing technology-based services which will create new jobs and represent new economic activity in the area.

REQUIREMENTS
The Loan Committee on a case-by-case basic determines specific rates and terms for ET 2000 Financial Assistance Fund participation according to the requirements of each transaction, however, the following criteria will generally remain consistent:

• Matching Funds - All loans and guarantees must be matched by private funds as equity contributions or other acceptable debt instruments. In general, the Loan Committee requires at least 100% matching funds from participating banks. Proposals that do not include bank participation must generally provide matching investment of at least 200% of the requested ET 2000 funds. Emphasis is placed on perpetuating the Funds through effective servicing of outstanding loans and management of repayments and Fund earnings.
• Lender of Last Resort - The ET 2000 Financial Assistance Fund is intended to provide needed "gap" financing to the fifteen (15) county impact region. It is not intended to compete with existing capital sources, but to assist only those "qualified" businesses which cannot otherwise obtain suitable financing. Businesses seeking assistance from the Fund must document a legitimate need which cannot be met by the existing market.
• Business Plan - The Loan Committee only considers investing in companies which demonstrate business acumen, technical expertise, and knowledge of their target market. Evidence of this is a documented, realistic business plan which contains a market analysis.
• Long Term Participation - The Loan Committee prefers participation which does not extend longer than five (5) years. ET 2000 Fund Loans will normally mirror the terms and conditions of the matching funds' bank participation loan. Consideration may be given to extending loan amortization and utilizing "balloon" or "bullet" repayment schedules in instances where a clear need is demonstrated.
• Periodic Reviews - Participating businesses are required to supply annual financial statements to the Small Business Development Manager for review within ninety (90) days of the end of the fiscal year of the business. The Loan Committee may require more frequent balance sheets, profit and loss statements, or other pertinent information. Periodic business and marketing plan reviews and updates may also be required.
• One-Time Participation - The Loan Committee does not anticipate future additional investments in client companies.
• Refinancing - Funding cannot be used to refinance existing debt.
• Equity Participation - The Loan Committee prefers not to obtain ownership interests in client business ventures. Consideration may be given to proposals for non-traditional debt instruments such as subordinated notes, interest-bearing securities, and debt repayment linked warrants or options. The Loan Committee is committed to a policy that puts no more than 20% of the Fund at any time in equity positions.