198/Maryland Manual

MIDFA may insure both asset-based and work-
ing-capital-related financing. Examples of the types
ofloans and other obligations that may be insured
by the Authority include term loans, start-up loans,
acquisition loans, letters of credit, leasing transac-
tions, and revolving loans.

To participate in MIDFA's programs, a company
must generally qualify in each of three basic catego-
ries: legal eligibility, economic impact, and credit-
worthiness (Code Financial Institutions Article,
secs. 13-101 through 13-141; Federal Internal
Revenue Code, sec. 103).

MIDFA's policy and decision-making body is a
nine-member Authority. Seven members are ap-
pointed to five-year terms by the Secretary of Eco-
nomic and Employment Development with the
approval of the Governor. The Secretary of Eco-
nomic and Employment Development or designee,
and either the State Treasurer or Comptroller of the
Treasury, as designated by the Governor, serve ex
officio. The Authority appoints an Executive Direc-
tor who serves as Secretary

MARYLAND SMALL BUSINESS
DEVELOPMENT FINANCING AUTHORITY
(MSBDFA)

Chairperson: Lloyd M. Arrington, Jr., 1993

Appointed by Governor: John J. Oliver, Jr., 1989;
William C. Womble, Jr., 1989; J. Roger Sullivan,
1990; Jerry Feigen, 1991; Dorothy E. Branson,
1992; Lillian H. Lincoln, 1992.

Ex officio: J. Randall Evans, Secretary of Economic &
Employment Development; Donald Walton, designee
of State Treasurer.

Stanley W. Tucker, Executive Director

217 E. Redwood St.
Baltimore, MD 21202 333-4270

The Maryland Small Business Development Fi-
nancing Authority (MSBDFA) was created in 1978
(Chapter 879, Acts of 1978). To provide financial
assistance to minority businesses, the Authority
administers four programs: Government Contract
Financing; Long-Term Guarantee; Equity Partici-
pation Investment; and Surety Bond Guaranty As-
sistance.

Government Contract Financing Program. For el-
igible firms with government contracts, MSBDFA
may guarantee a loan from a financial institution or
provide a direct loan for working capital and equip-
ment. These guarantees or loans may be provided
only as necessary to fulfill contracts on projects
financed by federal, State, or local government, or
a utility regulated by the Public Service Commis-
sion.

Long-Term Guarantee Program. For all eligible
firms, MSBDFA may guarantee and pay an interest
rate subsidy on a long-term loan made by a financial
institution for working capital, acquisition and re-
lated installation of machinery and equipment, or
necessary improvements to real property owned in
fee simple by the applicant.

Equity Participation Investment Program. For all
eligible firms, MSBDFA may invest up to 45 per-
cent or $100,000 (whichever is less) of the equity
needed to start a franchise operation. MSBDFA
requires the initial investment to be recovered
within five years.

Surety Bond Guaranty Assistance Program. All
small businesses are eligible. This program helps the
small contractor secure bonding by guaranteeing
90 percent of the losses that a surety company
incurs in the event of a breach of contract.

MSBDFA programs are unique. A major crite-
rion for approval of MSBDFA guarantees and loans
is the economic impact resulting from the use of
available funds. This impact is measured according
to the projected number of jobs retained and cre-
ated, and the projected amount of tax revenue
generated from the use of these funds.

The Authority consists of seven members ap-
pointed to five-year terms by the Governor. The
Secretary of Economic and Employment Develop-
ment and either the State Treasurer or Comptroller,
as designated by the Governor, serve ex officio
(Code Financial Institutions Article, secs. 13-201
through 13-234).

DAY CARE FINANCING PROGRAMS
Joan Case, Director

217 E. Redwood St.
Baltimore, MD 21202 333-4308

Established in 1988, Day Care Financing Pro-
grams administers two funds to promote economic
development, increase employment, and expand
quality day care in Maryland. To aid employers and
developers in the day care industry, the two financ-
ing funds provide financial assistance for small busi-
ness owners.

The Day Care Facilities Loan Guarantee Fund
was created in 1984 to help small businesses pro-
viding day care. The Fund finances up to 80 percent
of loans by a lender. It is available for day care
centers for infants, toddlers, and preschool age
children, as well as elderly and medically handi-
capped adults. Loan proceeds can be used for the
purchase of land, equipment, and supplies; renova-
tion; building construction; and working capital
(Code 1957, Art. 83A, secs. 6-201 through 6-213).

The Child Care Facilities Direct Loan Fund was
formed in 1988 (Chapter 248, Acts of 1988). The