Keola Rapozo, Owner, FITTED Hawaiʻi, Hua Kanu Loan recipient had this to say about his experience, "In business, it is crucial for growth that access to funds is available. OHA has provided an irreplaceable partnership in our business as it has allowed for a number of expansion opportunities over the years. The hiring of new employees, the building of new workspace and the expansion of our product offerings have all been made possible with the kōkua and guidance of OHA." Photo by Mark Kushimi.
Hua Kanu Loans are designed for established businesses owned by Native Hawaiians. Created on July 17, 2013, the low-cost loans are intended to help these small-businesses expand. Under the program, highly-qualified applicants are eligible for between $200,000 and $1 million. They are required to repay the loan over a seven-year period. The interest rate on this business loan is 4.00% APR 6.25 percent.
To enhance access for all persons of Native Hawaiian ancestry to credit, capital, and financial services & skills so as to create jobs, wealth, and economic & social well-being for all the people of Hawaiʻi
Important Information Regarding the OHA Hua Kanu Business Loan:
|4.00% APR (Final rate yet to be determined)||Term Loan 7 year term with possible 14 year amortization||$200,000 – $1,000,000|
The requirements of the principals and the types of entities that may be eligible to submit a loan application are as follows:
Unallowable Loan Activities
The following are unallowable uses for the loan proceeds:
The following are required documents that must be submitted at time of application:
Given the limited resources available and the high loan amount, OHA has established a rigorous and competitive evaluation process. Below are the criteria that each loan will be evaluated and scored.
The applicant must be able to address each of the criteria below in order for their loan application to be reviewed:
|Industry experience (10 points maximum)||Demonstrates understanding of own business’ industry, minimum of two years operating in same or similar industry, and understands opportunities and threats within the industry.|
|Differentiation (5 points maximum)||Understands business’ strengths and weaknesses. Developed a realistic business strategy and understands its relationship to its competitors.|
|Leadership experience (5 points maximum)||Demonstrates a proven track record in a leadership role(s), a minimum of three years as head of a company, and understands all segments of the business’ operations.|
|Owner’s/Manager’s understanding of the business plan (5 points maximum)||Is knowledgeable of all aspects of their business plan, can justify assumptions and projections, and can easily communicate the operational processes in regards to the stated goals and objectives.|
|Overall Reasonableness (5 points maximum)||Is the plan supported with current data and past performance information that justifies the assumptions and projections? Is the plan aligned with the trends in both the operations and industry? Have weaknesses been addressed?|
|Marketing Strategy (5 points maximum)||Does the marketing strategy support the projected outcomes of the company? Does the marketing plan address a variety of advertising strategies (radio, newspaper, social media, etc.)|
|Industry experience (10 points maximum)||Are revenues based on realistic expectation? Are expenses reasonable and account for any changes? Are assumptions reasonable?|
|Financial Projections (5 points maximum)||Is there a reasonable chance for the business to be profitable? Was the company profitable last year?|
|Profitability (5 points maximum)||Is there sufficient working capital to support current operations? Are Accounts Receivable collected within industry norm? Are Accounts Payable and Inventory controlled reasonably?|
|Owner’s Commitment (5 points maximum)||Has the owner contributed tangible assets in organizing the business? Is he readily willing to provide his personal guaranty and collateral?|
|Operating and net Profitability (10 points maximum)||Are annual revenue stable or improving? If increasing, is there sufficient capital to support the increase? Is profitability stable?|
|Cash Flow (5 points maximum)||Is business operating with a positive cash flow? Is cash flow managed systematically?|
|Owner Compensation (5 points maximum)||Is owner’s total compensation reasonable? Does it include excess distribution or bonuses for tax purposes?|
|Character (5 points maximum)||Review credit report of the principals of the business. Determine history of payback obligations. Are there any negative credit reports in the company’s history?|
|Is the business operating with a positive cash flow? (5 points maximum)||How is the cash flow of the business? Do they have sufficient capital resources?|
|Character (5 points maximum)||Review credit report on the company. If none, then credit report on the principals of the company. Determine history of payback obligations. Are there any negative credit reports in the company’s history?|
|Capacity (5 points maximum)||Is the business able to absorb the debt amount? Is there sufficient cash flow to service its debt obligations? Will there be sufficient cash flow if the business does not meet its projected revenue?|
|Capital (5 points maximum)||Is the company adequately capitalized to support ts existing obligations? Does the business have adequate capital to support its projected growth or expansion?|
|Collateral (5 points maximum)||Can the collateral requirement able to be met?|
|Conditions (5 points maximum)||Is this company operating in an industry that is stable in Hawaii?|
For more information please call Robert Crowell at (808) 594-1924.