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CREATINGANDSUSTAININGSMALLBUSINESSJOBS2012ECONOMICDEVELOPMENTREPORT TOOURPARTNERS2012wasayeartoworkharderandsmarterindeliveringmoreexibleSBA504nancingtothemaximumnumberofqualiedsmallbusinessconcerns.Throughtherecoverywhichweallwanttoaccelerate504reallycameintoitsownbydoingtwothingsEnsuringthatsmallbusinesshadaccessto504nancinginpartnershipwithawiderangeoflendersinordertoaccessnancingfortheirfacilitiesonthebesttermswhichenablesthemtogrowandcreatethemostjobs.Helpinggoodcompaniesthatweresaddledwithinferiormortgagedebttorenancetheirfacilitydebttolowertheircostsandaccesstheequitythatwaslockedupinthosefacilitiesandtoputittoproductiveworkhelpingthosecompaniesstabilizeandgrow.HugeprogressispossiblewiththeessentialcollaborativeworkofourpartnerswhoaresuchacriticalelementineachandeveryprojectwenanceincludingTHESMALLBUSINESSESwearesofortunatetoworkwithwhoaresodiverseandingeniousindevelopingstrategiesanduniqueblendsofproductsservicesandmarketnichesinordertosurvivegrowandeventhriveinthesechallengingtimes.Theyaretrulyinspirational.OURLENDINGPARTNERSThevitalityof504nancingdependsonacriticalmassoflendersactivelyparticipatinginourprogramthroughthickandthin.Ahugedebtofgratitudegoestoourmorethan50lendingpartnerswhoinspiteofthechallengesofthetimeshaveworkedhardtohelptheirclientsgetthebestpossibleloantermsbyworkingwiththe504program.THESMALLBUSINESSADMINISTRATIONwhoseemployeescontinueyearafteryeartoepitomizecommitmentandhardworkandwhoseguarantyhasprovidedaccesstocriticallyneededcapitalsothatmanythousandsofcompanieseachyearcanaccess504nancingtobecomemoreresilient.ATREMENDOUSTHANKYOUgoestoallofourpartners.Byworkingtogethertheeffectofourworkhasbeensomuchgreaterthanthesumofitsparts.SincerelyJamesR.BairdExecutiveDirectorCEO Thecoremissiono504lendinghasalwaysbeentohelpsmallbusinessescreatenewjobs.Wedothisbyhelpingcompaniesbuythespacetheyneedtogrowwiththebestpossiblenancingtermsandtopreservetheworkingcapitaltheyneedtogrowandcreatejobs.Thismissionhasgottenevenstrongerthroughoutthegreatrecessionandrecovery.Whilesomesmallbusinessesarestillworkingtosurviveorstabilizemanyareusing504loanstotakefulladvantageofcurrentmarketopportunitiesincludingextremelylowcommercialrealestatepricesandhistoricallylow504xedinterestrates.Thisiswhatsmallbusinessentrepreneursdo.Theyconsistentlycapitalizeonmarketopportunities.504nancingworksbestfortheseentrepreneursbecauseitSpecializesinthenichemarketofsmallbusinessowner-occupiedcommercialrealestateLeveragestheSBAguarantywithprivatelendernancingandexpertiseIsdeliveredbyCDCswhicharethelowestcostserviceprovidersinthemarketplaceProvidesaWindowtoWallStreetforAmericassmallbusinesseswhichprovidesmuchneededcapitalatthelowestpossiblecostandataxedratewhichismoreimportantthaneverinbuildingasustainablerecovery.Weinviteyoutoreviewour2012AnnualEconomicDevelopmentReportanddiscoverhowthegreattermsobtainedthrough504fnancingprovidetheuelsmallbusinessentrepreneursneedtomakesignifcantimpactsontheeconomyandontheircommunities.ACCOMPLISHINGTHE504MISSIONJOBCREATIONBAYAREADEVELOPMENTCOMPANY3 BUILDINGCOMMUNITIESWITH504FINANCING504nancingworksthroughoutoureconomyandeverysectorofourdiversecommunities.Inadditiontohelpingcompaniescreateandretainjobs504isalsoactiveinrevitalizingcommunitiesinassistingbusinessesownedbywomenveteransandminoritiesandinhelpingcompaniesadvancetechnologies.ManufacturingRenewableEnergyEnhancedTechnologyorProductExports.LOWMODERATEINCOMEAREAS34.3MINORITYOWNEDCOMPANIES22.9WOMENOWNEDCOMPANIES13.2OTHERSBAGOALS18.6BUSINESSDISTRICTREVITALIZATION18.9 LOANAPPROVALSINMILLIONSFISCALYEARSENDING93070080090010001100120020082009201020112012600504LOANSAPPROVEDSINCEINCEPTIONThrough2012wehavemadeloansto1922companies.Thistranslatesintoapproximately1.2billionof504nancing.BAYAREADEVELOPMENTCOMPANY5 JOBSCREATEDANDRETAINED110001200013000140001500016000FISCALYEARSENDING9302006200820102012JOBSCREATEDRETAINEDWITH504PROJECTS504loansprovideourclientswithaccesstoexpansioncapitalatoptimalratesandterms.Asaresult504fnancinghashelpedourclientscreateover16000jobs. MAXIMIZINGPRIVATECAPITALWITH504LOANSAll504projectsincludeaconventionalrstmortgagewhichmakesupapproximately50ofthetotalnancing.Asaresultour504activitytodatehasleveragedtotaldirectcapitalinvestmentsof3.3billion.BORROWERCONTRIBUTION486MILLION14.8504FINANCING1.2BILLION36.5BANKFINANCING1.6BILLION48.7BAYAREADEVELOPMENTCOMPANY7 ITHASBEENAPLEASURETOWORKWITHJOELAMPEONFIVESBAFINANCINGDEALSsince2003.Hepossessesthehighestlevelofprofessionalisminallthathedoes.Heisthoroughefcienttimelyandbestofallcompletelytrustworthy.RuthWeizmanWatersaversIrrigationConcordCAThe504renanceprogramisabsolutelytherighttooltodealwiththedramaticchangeintheabilityofbusinessestocopewithre-valuationofproperties.THE504REFINANCEPROGRAMALLOWEDUSTOREFINANCETHENOTEATAHIGHERVALUEwhilekeepingourexpensesthesameandreducetheamountofexposuretheoldlendernowhas.RobertLeeDiedeConstructionLodiCAWefoundagreatbuildingandwegotitatagreatratebecauseofSBAfunding.OUREMPLOYEESAREOURBIGGESTASSETandweallworktogethertoproudlycreateaworld-classproduct.Thisnewspaceallowsusroomforgrowthandtocreatenewjobs.TomFrainierCEOSemifreddisAlamedaCATHE504REFINANCEPROGRAMALLOWEDUSTOALMOSTDOUBLEOURSALESTHISYEARoverlast.Notonlydidsalesimprovedramaticallybutourprotabilityhasalsoimprovedmorethan100over2011.TherenanceprogramwasaGodsendandIhopeitcontinuesforthesakeofothersmallbusinessesinourcountry.MichaelR.HarveyBurlingameAutomotiveInc.DBAMikeHarveyHondaBurlingameCA CALCAINGAVEUSGREATSERVICE.IFELTLIKEWEWERECAREDFORANDOURNEEDSWEREIMPORTANTTOEVERYPERSONATBAYAREADEVELOPMENTTHATIWORKEDWITH.AnythingIdidnotunderstandwasexplainedveryquicklyandIalwaysreceivedapromptresponsetoanyofmyneeds.KathleenBurgessOwnerCen-CalGeneralConstructionFresnoCATHESTAFFATBDCAREVERYDETAILORIENTEDANDPROFESSIONAL.Whentheysaytheycandothisloanforyoutheymeanitandtheytakecareofit.AngelineMahabaliPacifcMedicalInc.PetalumaCABAYAREADEVELOPMENTCOMPANY9BOBTHOMPSONANDYOURSTAFFKNOWHOWTOMAKETHINGSHAPPEN.Everythingwentsmoothlyandinatimelymanner.Wehadplentyofadvancenoticationandguidanceforitemsneededandtherewasneveratimewhenanyaspectofthenancingwasheldupbythe504process.StuartWalkenhorstPresidentWalkenhorstsCompanyNapaCAThroughtheSBA504renanceprogramourcompanywasabletoCONSOLIDATEOUTSTANDINGLOANSANDGETALONGTERMLOWERINTERESTRATE.Italsoenabledustostayinourbuildingandreducemonthlycosts.Withtheadditionalmonthlysavingswecannowinvestbackintoourcompanyandcreatenewjobs.EnikoSarkisianDependableFurnitureManuacturingInc.SanLeandroCA Helpingsmallbusinessesgrowandcreatenewjobsiscriticaltooureconomysrecoverybutitsonlypartoftheequation.Theotheressentialpieceishelpingsuccessulsmallcompaniessustainthejobstheyhavealreadycreatedandtobereadyoruturegrowth.AkeytooltoaectthiswastheTemporary504RefnancingProgramwhichwascreatedbytheadoptionotheSmallBusinessJobsActo2010andunortunatelysunsetinSeptembero2012aterjustlessthanayearoulloperation.Theimpactsofthegreatrecessionandtheslowrecoverycontinuetoaffectaccesstocapitalforgoodsmallbusinesses.504renancingwasenactedtoaddresstheneedsoftheseexistinggoodcompaniesthatalready504REFINANCINGTHEBESTTOOLTOSUSTAINSMALLBUSINESSJOBSownedtheirbusinesspropertiesandwerecurrentontheirexistingloansbutweresaddledwithpoorlystructureddebtlikeloanswithballoonpaymentscomingdueashortamortizationorcompaniesneedlesslypayinginterestratesfarabovethemarket.504renancingalsohelpedcompaniesaccesstheequitylockedupintheircommercialrealestateanduseittorecapitalizetheiroperationstobecomemoresustainablenowandpoisedforfuturegrowth.Theneedforsuchaprogramamongsmallbusinessesisclearlyevidencedbythefactthatrenancingaccountedforafullone-thirdofall504applicationsapprovedin2012andtherewereoverabilliondollarsofsmallbusinesscapitalneedsturnedawayattheprogramsunsetdate.Effortsareunderwaytoextendtheprogram.Doingsowouldrepresentaclearrecognitionthatresponsiblycreatingandsustainingsmallbusinessjobsareofcriticalimportancetoournationsrecovery. OTHERECONOMICDEVELOPMENTACTIVITIESInadditiontoallofthejobscreatedandothereconomicdevelopmentbroughtonthroughourSBA504nancingactivitiesBayAreaDevelopmentiscommittedtothecommunitiesweserve.Wesupportmanyothersmallbusinesseconomicdevelopmentandcommunitydevelopmentactivitiesfromthenancialsponsorshipoftechnicalassistancetrainingprogramsandsmallbusinessawardsprogramstogeneralcommunityprogramsupport.Herearejustafewoftheexcellentprogramsandorganizationsthatweassistedoverthelastyearwww.acsbdc.orgwww.sfsbn.orgwww.smallbusinesscalifornia.orgsbdc.ucmerced.eduTheAlamedaCountySBDCprovidesclassestechnicalassistanceandpersonalizedtrainingtobuddingentrepreneursandtoexistingbusinessownersinterestedinacceleratingthesuccessotheirventures.WehavesponsoredclassesandworkshopsortheSBDCandourstaparticipatesinmanyAccesstoCapitaleventseachyear.TheSanFranciscoSmallBusinessNetworkservesasastrongclearandunifedvoiceothesmallbusinesscommunityinSanFrancisco.BDCisamemberothisimportantassociationandhelpstosponsortheirannualsmallbusinessawardsevent.SmallBusinessCaliorniaisaproactivenon-partisansmallbusinessadvocatewhoseonlyagendaisthewellbeingoCaliornias3.2millionsmallbusinesses.BDCisamemberoSmallBusinessCaliorniaandsponsorsmanyotheirimportantbusinessoutreachandadvocacyactivities.TheUCMercedCentralCaliorniaSBDCNetworkprovidesentrepreneursandsmallbusinesseswithhighqualityeducationconsultingsupportorinnovationaccesstoinormationandtoolsnecessarytobuildsuccessulsustainablebusinesses.BDCworkedwiththeMercedSBDCtohelpwiththesponsorshipoSmallBusinessWeekintheFresnoDistrictotheSBA.BAYAREADEVELOPMENTCOMPANY11 AtBayAreaDevelopmentgreatcustomerserviceiswhatweliveby.Since1981weveofferedcommonsenseexplanationsandcreativesolutionsforthemostcomplexsmallbusinesssituations.Andwhilewereproudtobeamongthetoptwentyofover300SBA504lendersnationwidethesatisfactionandsuccessofourclientsiswhatmotivatesuseverydayandisthetruemeasureofoursuccess.HEADQUARTERS1801OaklandBlvd.Suite100WalnutCreekCA94596Phone925926-1020888504-0504CENTRALVALLEYOFFICE114E.ShawAve.Suite207FresnoCA93710Phone559226-3700BAYAREADEVELOPMENTCOMPANYwww.bayarea504.com