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HomeMy WebLinkAboutVantage Clinical - Loan Request To: Deschutes County Board of Commissioners From: Judith Ure, Department of Administrative Services Date: June 20, 2013 Subject: Economic Development Loan Requests Attached are briefing papers describing two economic development loan requests scheduled for discussion during the Board’s June 26, 2013 work session. Both requests have been reviewed by Economic Development for Central Oregon (EDCO) and evaluated by EDCO’s Due Diligence Committee. The resulting recommendations are as follows: Vantage Clinical Solutions, Inc.: $10,000 LMH Industries, Inc.: $40,000 Representatives from EDCO will be attending the June 26 meeting to provide additional information and to answer any questions Board members may have. The Deschutes County Economic Development Fund currently has a cash balance of approximately $142,000. This balance reflects loan repayments received year-to-date as well as loans and grants approved and paid during this fiscal year, including: December 19, 2012: Consumer Cellular - $50,000 January 17, 2013: Energyneering, Inc. - $34,000 March 16, 2013: Venture Catalyst Program - $20,000 June 13, 2013: NAVIS - $50,000 An additional $25,000 payment to the Redmond Airport in support of the new direct flight service to Los Angeles is pending based on the Board’s approval of modifications to the resolution that governs the Economic Development Fund. If the revised language and payment are approved, the fund balance available for new loan requests, including those described above, will be approximately $117,000. Please contact me if you have any questions concerning the Economic Development Fund or Economic Development Loan program in advance of the June 26 meeting. BRIEFING PAPER FOR Vantage Clinical Solutions, Inc. Request for Deschutes County Forgivable Loan May 1, 2013 Company Request: $10,000 EDCO Recommendation: $10,000 Proposed Job Creation within 12 months of March 4, 2013: 5 new employees Average Pay for New Employees (all positions, excluding commissions): $40,600 Industry: Software and Medical Billing Solutions for Medical Clinics Website: www.VantageClinicalSolutions.com Company Background: Vantage Clinical Solutions is a business-to-business services company which specializes in the healthcare sector. The company was founded in 2007 and has grown to eleven employees (nine of which have been added in the last three years) serving clients in 20 states. The central tenet of the company is to “improve healthcare through entrepreneurship”. Vantage accomplishes this through providing a variety of needed business and medical services (primarily software and billing solutions) to small healthcare practices in order to improve competitiveness in the markets their customers serve. Vantage services 24 clients currently (90% outside Central Oregon) and is expanding service to existing clients while bringing more on each month. With many changes occurring in the healthcare sector, Vantage has uniquely positioned itself to be competitive despite trends showing movement of practitioners to larger medical facilities and practices. Vantage focuses on a core group of entrepreneurial medical professionals that service rural areas and/or find benefits in maintaining smaller, more specialized clinics. Based on projected growth of new customers as well as providing additional services to existing clients, Vantage plans on adding at least five more employees to its team. These positions include a software developer, business services manager, client services administrator, and two medical billers, all full-time positions. Forecasted average salary for these positions is $40,600, not including benefits. The $10,000 in Deschutes County Forgivable Loan funds will go towards purchases of new server and computer equipment and build-out critical to the company’s next phase of growth. Vantage’s capital investment will include data warehousing development, an additional server, enterprise software, and five new computers. Total investment for this expansion will total around $60,000. EDCO Recommendation A due diligence process was completed by the Bend Deschutes County Forgivable Loan Due Diligence Committee on May 1 st , 2013. The participants in the review included, Bruce Barrett, Business Consultant; Bill Kuhn, Commercial Banker; and Nate LiaBraaten, EDCO (Economic Development for Central Oregon) Business Development Manager. HR Specialist, Eric Strobel, is also a member of the Due Diligence committee and, although not able to participate in the review meeting, was still able to weigh in on the process and recommendation as he is very familiar with the company and its principals. After thorough review of the application, onsite tour of operations, and review of financial statements, the committee supported the following recommendation: EDCO is recommending Deschutes County award $10,000, or $2000 per job created over 12 months and retained for an additional 24 months following the application date. Conditions include: • Company hires 5 full-time positions by March 4, 2014 and maintains total employment of 16 local employees until March 4, 2016 • Providing quarterly employment updates and the ability to inspect complete financial statements from award date through termination of the yet-to-be executed agreement with Deschutes County. Failure to meet the above provisions would result in partial or full repayment of the loan, with interest.