* This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting. ALL [00:00:01] RIGHT, SO WE'RE GONNA CALL THE MILLION TO ORDER HERE. UH, THIS IS THE ECONOMIC DEVELOPMENT COMMISSION INVOLVING LOAN SUBCOMMITTEE AGENDA, UH, THAT WE'RE GONNA JUST START. SO ITEM NUMBER ONE, UH, IS A RECOMMENDATION TO APPROVE THE MINUTES OF THE ECONOMIC DEVELOPMENT COMMISSION. SO I CAN INTERRUPT FOR A MOMENT. WE NEED TO DO A OFFICIAL ROLL CONFERENCE. THAT'S RIGHT. OKAY. I APOLOGIZE. AND SO I'LL GO AHEAD AND CALL ROLL. COMMISSIONER MONTOYA IS HERE. TELL ME IF I'M SAYING THAT. UH, MATOYA HERE. MONTOYA? YEP. CORRECT. OKAY. UH, COMMISSIONER LARKINS. COMMISSIONER. IS IT CONE OR CONE? CONE. COMMISSIONER CONE. ALL RIGHT. WE HAVE A QUO. OKAY. THANK YOU. THANK YOU. ALL RIGHT. SO NOW TO THE REGULAR AGENDA. WE'RE LOOKING AT FIRST ITEM NUMBER ONE, WHICH IS A RECOMMENDATION TO APPROVE THE MINUTES OF THE ECONOMIC DEVELOPMENT COMMISSION. I REVOLVING LOAN FUND SUBCOMMITTEE MEETING ON SEPTEMBER 12TH, 2023. SO SECOND. ALRIGHT. ALL RIGHT. GOT A FIRST FROM COMMISSIONER MATO. THAT SOUNDS MATOYA MATOYA. AND THEN A SECOND FROM COMMISSIONER COLMAN. AND A WAY OF VOTE. COMMISSIONER MATOYER. YES. COMMISSIONER COHEN. YES. MOTION CARRIES. PERFECT. THANK YOU COMMISSIONERS. ALL RIGHT. NOW MOVING ON TO ITEM NUMBER TWO, WHICH IS A RECOMMENDATION TO APPROVE THE REVOLVING LOAN APPLICATION IN THE AMOUNT OF 75,000 FOR DION AUTO REPAIR AND TRANSMISSION. LOCATED AT 1540 EAST PACIFIC COAST HIGHWAY, LONG BEACH, CALIFORNIA 9 0 8 0 6. AND I'LL HAND IT OVER TO THE ANDREA FOR THAT ONE. YEAH. OKAY. SO WE HAVE TWO THAT WE'RE GONNA PRESENT TODAY. UM, THAT NO RELATION, BUT THEY'RE BOTH IN THE AUTOMOTIVE INDUSTRY. , AS YOU CAN SEE, UM, DAILY OWNED AUTO REPAIR AND TRANSMISSIONS. S CORP OWNED A HUNDRED PERCENT BY VICTOR M DE LEON BARRIOS. UM, HE'S BEEN IN THE INDUSTRY LIKE OVER 20 YEARS. UH, STARTED HIS BUSINESS UM, IN 2021. HE HAD BEEN WITH ANOTHER REPAIR SHOP FOR LIKE 15 YEARS BEFORE THAT. UM, SO RELATIVELY NEW COMPANY. UM, WE DID HAVE, UH, TWO YEARS OF TAX RETURNS TO REVIEW THAT YOU SEE THERE. UM, LIKE I SAID, HE IS FILING ON THE S CORPORATION ON 1120 CORPORATE RETURN. UM, HAD SOME GOOD SALES GROWTH. UM, YOU KNOW, ALMOST DOUBLED SALES FROM 2021 TO 2022 85% GROWTH. AND HE'S UP A LITTLE BIT FOR 2023. UM, AND REALLY HE JUST WANTS MORE EQUIPMENT. UM, I GAVE A PRETTY EXTENSIVE LIST THERE IN THE WRITEUP OF THE EQUIPMENT, UM, THAT HE IS TRYING TO PURCHASE. BUT HE PROVIDES, YOU KNOW, UM, BRAKE SERVICES, OIL CHANGES, SUSPENSION REPAIR, ENGINE REPAIR, CLUTCHES, OBVIOUSLY TRANSMISSIONS IS HIS SPECIALTY, UM, AS HIS NAME INDICATES. SO HE IS LOOKING TO GET, UM, TWO TO THREE NEW LISTS, RIGHT. UM, TO BE ABLE TO EXPAND, UM, HIS SERVICES. HE'S LOOKING FOR A COUPLE OF DIFFERENT MACHINES, A BREAK LACE, YOU KNOW, SOME OF THESE LIKE DIAGNOSTIC SCANNING TOOLS, UM, STUFF LIKE THAT. I DID ASK HIM FOR A PRETTY EXTENSIVE LIST AND HE GAVE ME A REALLY GOOD LIST WITH LIKE, AGAIN, I DON'T KNOW WHAT ALL THESE BRANDS ARE. I'VE HEARD OF SNAP-ON OF COURSE, AND I KNOW WHAT A WELDING MACHINE IS. BUT THESE ARE ALL PRETTY, UM, STANDARD, YOU KNOW, AUTO, UM, AUTOMOTIVE INDUSTRY EQUIPMENT AS WELL AS HE GAVE ME SOME BIDS. UM, HE WAS LOOKING FOR MORE, HIS BIDS DID TOTAL CLOSER TO A HUNDRED K IN EQUIPMENT, UM, THAT HE IS LOOKING FOR. BUT THERE WAS SOME INSTALLATION COSTS INCLUDED THERE, WHICH WE CAN'T FUND, RIGHT? IT'S JUST THE ACTUAL EQUIPMENT. MM-HMM. INSTALLATION IS CONSIDERED LIKE LABOR, RIGHT? AND WOULD TRIGGER UM, DAVIS BACON IN THIS CASE. SO WE TRY TO STAY AWAY FROM THAT. ALSO, JUST, YOU KNOW, GIVEN THE CASHFLOW SCENARIO OF THE COMPANY, WE DECIDED TO LOWER IT A LITTLE BIT TO THE 75 K. UH, THE TERM IS SEVEN YEARS, PROPOSED TERM, SEVEN YEARS, UM, YOU KNOW, FULLY AMORTIZING LOAN, UM, YOU GUYS ARE ABLE TO DO 75% PRIME. SO WE'RE TRYING TO OFFER A LITTLE BIT BETTER RATES TO SOME OF THESE GUYS 'CAUSE THE PRIME RATE IS UP AT EIGHT AND A HALF PERCENT RIGHT NOW. SO SIX POINT HALF PERCENT IS THE FIXED RATE, IS THE PROPOSED RATE. UM, BUT THERE WON'T BE ANY INTEREST ONLY OR ANYTHING LIKE THAT BECAUSE HE IS ALREADY UP AND RUNNING. MM-HMM. , UM, HE IS GONNA ADD TWO FULL-TIME EQUIVALENTS OVER THE NEXT TWO YEARS. UM, HE DOES ALREADY HAVE, UM, TWO FULL-TIME EMPLOYEES INCLUDING HIMSELF. SO THERE'S THREE EMPLOYEES NOW, SO HE WOULD BE INCREASING UP TO FIVE TOTAL. UM, SO THERE'S SOME GOOD JOB CREATION I THINK THERE. UM, HE HAS PRETTY GOOD REVIEWS ON YELP AND STUFF. UM, THE MAIN WEAKNESSES OF THE TRANSACTION ARE THAT, YOU KNOW, THE HISTORICAL CASH FLOW IS LACKING. MM-HMM. , HE WAS SUPPORTING [00:05:01] SOME LOSSES. UM, HOW MUCH CASH ON HAND? SO HE HAS CASH ON HAND. IF YOU LOOK AT THE BALANCE SHEET SHEET, UM, HE HAD ABOUT, HE HAD LIKE 9,000 IN 2021 YEAR END, ABOUT 3 30, 820, 22, 3620 23. SO IT IS PRETTY SKINNY ON THE CASH SIDE. UM, LET'S SEE IF MY DAYS' CASH CALCULATION IS IN HERE, IT DOESN'T PRINT OUT. SO THAT'S THIN THOUGH. I WOULD SAY THAT'S PROBABLY LIKE UNDER FIVE DAYS CASH, MAYBE THREE. DOING A QUICK MATH IN MY HEAD HE'S SHOWING A LITTLE BIT MORE CASH OR PROJECTING MORE CASH. 'CAUSE WE WOULD BE INJECTING RIGHT THIS, THIS CASH FLOW THAT WOULD HOPEFULLY HELP INCREASE THOSE SALES. ALSO, UM, 2023 YEAR END I DID PROJECT A SLIGHT LOSS, UH, DUE TO THE DEPRECIATION EXPENSE THOUGH. SO WHEN YOU LOOK AT THE PART THAT HAS THE CASH FLOW ANALYSIS AND COVERAGE RATIOS, THE VERY BOTTOM PORTION HAS THE ADJUSTED CASH FLOW ANALYSIS. AND SO YOU CAN SEE FOR 2023 YEAR END THERE'S LIKE A 4,000 LOSS. BUT THEN YOU ADD BACK IN ABOUT 28 K IN DEPRECIATION, ADDING BACK SOME INTEREST EXPENSE. AND THEN WE'RE TAKING OUT HIS DEBT SERVICE. PROJECTED DEBT SERVICE ON THE TOTAL LOAN IS ABOUT 13,364. AND HE HAS, UM, AN OUTSTANDING AUTO LOAN. UM, THAT'S ABOUT $6,000 A YEAR. THAT'S ON THE BALANCE SHEET, UM, THAT YOU CAN SEE THERE UNDER LONG TERM DEBT. HE OWES ABOUT 30 K ON THAT RIGHT NOW. 32,000 ON A, ON A WORK TRUCK. UM, SO HE DOESN'T HAVE VERY MUCH EXISTING DEBT. HE HAS A GOOD CASHFLOW FOR THE PROJECTED PERIODS, BUT THE EXISTING PERIODS DOES NOT SHOWING CASHFLOW. BUT HE DOES HAVE SOME OUTSIDE INCOME. HIS PERSONAL FINANCIAL STATEMENT ON PAGE FIVE THERE SHOWS THAT HE HAS, HE HAD ABOUT 73, ALMOST 74 K IN W TWO INCOME, UH, FOR 2022 TAX RETURN. UM, HE HAD A PRETTY GOOD CREDIT SCORE. 7 79. PRETTY GOOD. THAT'S DEFINITELY CONSIDERED VERY GOOD. MM-HMM , UM, YOU KNOW, HIS PERSONAL FINANCIAL STATEMENT ISN'T GREAT, BUT HE DOES OWN HIS PERSONAL RESIDENCE. THAT WOULD BE A SUPPORTING FACTOR, YOU KNOW, TO HIS PERSONAL GUARANTEE. SO WE DON'T TAKE A LIEN ON THAT FOR ANY LOANS THAT ARE UNDER A HUNDRED K. WE WOULD TAKE THE FIRST POSITION, UCC ON THE BUSINESS ASSETS. UM, BUT THE PERSONAL RESIDENCE AND HIS PERSONAL FINANCIAL STATEMENT, YOU KNOW, ADJUSTED NET WORTH OF 172 K IS LIKE THE VALUE THAT SUPPORTS HIS PERSONAL GUARANTEE. AND THEN THE COLLATERAL ANALYSIS IS ON PAGE FOUR. WE ARE SHOWING 1.14 TO ONE COLLATERAL COVERAGE, UM, WHICH IS PRETTY GOOD. AGAIN, JUST WITH THE BUSINESS ASSETS. I DID INCLUDE THE RESIDENCE THERE SO YOU CAN SEE WHAT THE ESTIMATED VALUE IS AND WHAT HIS PRIOR LIEN IS ON HIS MORTGAGE. UM, BUT I DIDN'T PUT ANY VALUE IN THAT LAST COLUMN 'CAUSE WE'RE NOT ACTUALLY LEANING. IT JUST WANTED YOU TO SEE HE HAS 45% LOAN TO VALUE ON HIS HOME. PRETTY GOOD. UM, AND, BUT WE STILL WOULD HAVE SOME GOOD VALUE THERE WITH, UH, THE BUSINESS ASSETS, UM, INCLUDING THE FIRST LIEN ON THE MACHINERY EQUIPMENT THAT WE FUND. AND THAT WOULD BE A CONDITION OF THE LOAN. YEAH. TWO QUESTIONS. ONE ON THE COLLATERAL COVERAGE RATIO, IS THERE LIKE A, A STANDARD OR LIKE A BENCHMARK THAT YOU'RE LOOKING FOR IN WHICH YOU'RE LIKE, OKAY, THAT'S A PRETTY GOOD NUMBER. YOU WANT IT TO BE OBVIOUSLY ONE TO ONE. YOU ONE TO ONE HAVE AT LEAST ONE, YOU KNOW, COVER A HUNDRED PERCENT COVERAGE RIGHT. FOR YOUR LOAN AMOUNT. UM, BUT A LOT OF THESE LOANS GET DONE, YOU KNOW, 75% LIKE 0.7 TO ONE. OKAY. ISN'T TERRIBLE. A LOT OF 'EM ARE COMPLETELY UNSECURED THOUGH. MM. THEY'RE, THEY'RE LIKE IN THE ZERO OR 0.2, 0.3 TO ONE. IT'S NOT UNCOMMON 'CAUSE PEOPLE DON'T HAVE A LOT OF BUSINESS ASSETS OR THEY'VE ALREADY FULLY DE APPRECIATED THEM. GOT IT. OR THEIR BOOK VALUE. AND YOU CAN'T REALLY ASSIGN VALUE UNLESS, UNLESS UM, YOU GET AN APPRAISAL AND THEN THAT COSTS A LOT OF MONEY AND IS TYPICALLY NOT WORTH IT. MM-HMM. UM, SO WE ARE GOING WITH BOOK VALUE HERE AND THEN THE PURCHASE VALUE OF THE EQUIPMENT. UM, YOU CAN SEE THE DISCOUNT RATES THERE. SO PERSONAL RESIDENCES ARE DISCOUNTED THAT 80% NEW MACHINERY EQUIPMENT, 75% EXISTING, UM, MACHINERY OR EQUIPMENT EXISTING FIXED ASSETS IS 50% AND INVENTORY RECEIVABLES ARE 10%. AND THOSE THINGS ARE DEFINED IN THE ADMIN PLAN AND THEY'RE PRETTY, UM, CONSISTENT WITH LIKE PRUDENT LENDING STANDARDS IN THE INDUSTRY. SOME PLANS THOUGH, OR LOAN FUNDS, UM, MAY ASSIGN MORE VALUE LIKE INVENTORY AND RECEIVABLES. 10% IS PRETTY LOW. BUT REALLY IN A LIQUIDATION SCENARIO, YOU'RE NOT GONNA GET ANY MONEY ON THAT. IT'S PROBABLY EVEN LESS THAN 10% TO BE HONEST. BUT OTHER, UM, EVALUATION, YOU KNOW, CATEGORIES HAVE ASSIGNED, YOU KNOW, UP TO 20%, SOME PEOPLE ASSIGN 50%. IT JUST [00:10:01] DEPENDS ON YOUR, WHAT YOUR UNDERWRITING CRITERIA SAYS. AND SO THESE PERCENTAGES ARE DEFINED IN THE, IN THE ADMIN PLAN, WHICH IS LIKE THE POLICIES AND PROCEDURES FOR THE LOAN FUND. GOT IT. AND THEN, UM, YOU NOTED WE WERE UP TO 75% OF PRIME. MM-HMM. IS THAT, UM, AND JUST REMIND ME GENERALLY, IS IT THAT, ARE WE UP TO THAT NUMBER SO WE CAN GO ANYWHERE BETWEEN ZERO AND 75? OR IS IT THAT WE START AT 75 AND THAT IS WHAT WE'RE, ARE ALLOWED TO USE AS OUR SET FOR THE INTEREST RATE? GOOD QUESTION. SO THIS IS ALSO SOMETHING THAT'S DEFINED, UM, IN YOUR ADMIN PLAN. AND ALSO THE EDA HAS SPECIFIC REQUIREMENTS ON WHAT THE FLOOR CAN BE. SO TYPICALLY THE FLOOR IS 4% OR 75% PRIME, WHICHEVER IS LOWER. SO TECHNICALLY YOU GUYS COULD GO DOWN TO 4% RIGHT NOW. GOT IT. AND THEN YOUR HIGH IS PRIME PLUS 4%. SO PRIMARY NOW IS EIGHT. THAT WOULD BE 12.5% WOULD BE THE, THAT'S, THAT'S YOUR MAX RANGE. SO WE ARE GOING ON THE LOWER END. UM, I THINK FOR THIS, YOU GUYS WERE DOING A TON OF UM, LOANS AT 2.44 SET FIX WHEN PRIME WAS DOWN AT 3, 2 5. SO THAT'S WHEN, UM, IT COULD BE LOWER THAN THE FOUR. GOT IT. IF PRIME RATE WAS SO LOW. SO DURING THE PANDEMIC BEFORE BASICALLY THE BEFORE 2023, WHEN THE RATE WAS 3, 2, 5 MM-HMM. , UM, ALL YEAR LOANS WERE AT 2.44 FIXED. GOT IT. SO THIS IS STILL QUITE A BIT HIGHER THAN NORMAL AND I'D SAY, BUT STILL MUCH LOWER THAN, UM, I THINK WHAT A TYPICAL BUSINESS LOAN IS, YOU KNOW, YOU GUYS ARE ON THE LOW END, A LOT OF MICRO LOANS ARE DEFINITELY IN THE DOUBLE DIGITS, 10% TO 12%. BUT BECAUSE YOU GUYS, UM, ARE NOT BORROWING MONEY, MOST, A LOT OF OTHER MICRO FUNDS ARE KIND OF LIKE INTERMEDIARY LENDERS. THEY BORROW MONEY AND THEN RELENT IT AND THEY HAVE TO COVER THE SPREAD OF WHAT THEY PAY ON THE BORROWED MONEY. THIS IS GRANT FUNDS, SO IT'S FREE MONEY, SO YOU HAVE NO COST OF FUNDS. SO THAT'S USUALLY WHY MOST EDAR REPS ARE REALLY OFFERING PRETTY GOOD AFFORDABLE TERMS. GOT IT. UM, AND YOU KNOW, HE'S A MINORITY BUSINESS, UM, WITH THE JOB CREATION, YOU'RE TRYING TO SWEETEN THE DEAL 'CAUSE YOU'RE MAKING CREATE JOBS. SO USUALLY THE CONCESSION IS IS THAT THEY'RE GETTING A LITTLE BIT BETTER INTEREST RATE. GOT IT. 'CAUSE THEY ARE GONNA HAVE TO SPEND EXTRA MONEY IN THE FUTURE. MY QUESTION IS MM-HMM. OF HIS MONTHLY PAYMENT, WHAT PERCENTAGES OF THAT IS OF HIS UM, HIS TOTAL REVENUE OF THE MONTH? UM, THAT'S A GOOD QUESTION. SO HIS MONTHLY PAYMENT HERE'S ABOUT 1100. AND SO, UM, I'M TERRIBLE AT DOING NUMBERS IN MY HEAD, SO, SO LET'S LOOK AT SIX 30. UM, THAT'S THE MOST RECENT STATEMENTS WE HAD. HE DID 284 K, SO LET'S JUST CALL IT YEAH, TWO EIGHTY FOUR DIVIDED BY SIX IS ABOUT 47,000 A MONTH IN SALES THAT HE'S DOING FOR A THOUSAND DOLLARS PAYMENT. SO WHAT IS THAT? I GOT IT. OKAY. ONE, LET'S CALL IT A LIGHTER, WE HAD A LOWER REVENUE, BUT YEAH, 1100 DIVIDED BY 47,000. JUST TO GIVE YOU A PERCENTAGE, LIKE 2%. OKAY. 2.3%. YEAH, THAT'S WAY OFF OF WHAT I HAD WITH HIM. MM-HMM. . I DEFINITELY WASN'T A MATH MAJOR . SO YEAH, I MEAN HE IS LOOKING AT DOING OVER HALF A MILLION IN SALES FOR 2023 YEAR END. HIS FIRST YEAR HE STARTED OUT AT 265 K IN SALES. I FAKED IT. OH WAIT, JUST NOW? YEAH. THAT'S NOT UNTIL 81. YEAH. . UM, YEAH, SO I WAS, I MEAN THE CONCERN IS THAT THERE'S NO HISTORICAL CASH FLOW. RIGHT. HE'S REPORTING LOSSES. SO TO MY STRENGTHS AND WEAKNESSES. RIGHT. HIS MM-HMM. MAIN WEAKNESS IS THAT HE HAS UM, ALL LACK OF CASH FLOW COVERAGE FOR THE PERIODS BECAUSE HE'S SHOWING NET LOSSES. UM, THE COMPANY IS GROWING, YOU KNOW, RAPIDLY. THERE IS, THEY ARE CLOSE TO BREAKEVEN ON THAT NON-CASH BASIS. LIKE WHEN THEY, WHEN YOU ADD BACK THE DEPRECIATION. 'CAUSE HE DID HAVE DEPRECIATION IN 2022 YEAR END AS WELL, ABOUT 24,000. SO IT LOOKS LIKE ON, ON THE BOOKS HE HAD A 39 K 40 K LOSS. BUT ONCE YOU ADD BACK THE DEPRECIATION, IT WAS MORE LIKE 15 K LOSS, WHICH IS RELATIVELY CLOSE TO BREAK EVEN I'D SAY. UM, I THINK HE IS, YOU KNOW, TAKING ALL THE EXPENSES HE CAN HE, I THINK HIS WIFE HAS SOME W TWO INCOME 'CAUSE HE'S PAYING HIM HIMSELF. IF YOU LOOK AT HIS OFFICER'S SALARY LINE ITEM PAID HIMSELF ABOUT 49 K IN W TWO INCOME ON THE BOOKS FOR 2022 AND HE REPORTED 73 K ON HIS PERSONAL TAXES. SO THE REST IS GOING TO THE WIFE'S SALARY AS WELL. SO HE IS TRYING TO LOWER HIS TAXABLE INCOME BY HAVING MORE DEDUCTIONS [00:15:01] ON THE BUSINESS SIDE. SO THAT IS ALL JUST TO SAY, I DO BELIEVE THERE'S SOME HIDDEN CASH FLOW THERE, WHICH IS WHAT PEOPLE SAY WHEN PEOPLE MAYBE ARE NOT REPORTING A HUNDRED PERCENT . MM-HMM. . UM, WHICH IS NOT UNCOMMON WITH THESE, THESE UM, KIND OF SMALLER BUSINESSES, YOU KNOW. UM, BUT TO ME I THINK THAT SHOWS, I ALWAYS GO TO THE PERSONAL FINANCIAL STATEMENT. I MEAN HE OBVIOUSLY COULD AFFORD TO BUY A HOME, YOU KNOW, OVER TIME AND HAS A REALLY HIGH CREDIT SCORE. 7 79 IS REALLY GOOD. HE HAS LIKE PRETTY LOW REVOLVING DEBT FROM WHAT I REMEMBER. HIS REVOLVING DEBT. WHAT DO YOU FIND MOST ATTRACTIVE ABOUT THIS ALUM? UM, HE HAS A GOOD, UH, CPAI REALLY LIKE IT. HE HAS THIS LADY LUCY, MY STAR TAXES OR SOMETHING. I'VE BEEN COMMUNICATING WITH HER. MM-HMM. BECAUSE HE IS UH, SPEAKS, HE SPEAKS ENGLISH, BUT HE'S PRETTY MONOLINGUAL SPANISH. MM-HMM. . UM, SO SHE'S KINDA ON THE ONE. SO HE HAS GOOD BOOKS AND HE HAS A GOOD BOOKKEEPER AND I LIKE HER AND SHE GAVE ME ALL THE PAPERWORK THAT I NEEDED. AND UM, I THINK HE HAS, I THINK HE KNOWS WHAT HE IS DOING HIS, HIS HISTORY TOO. LIKE HE'S BEEN IN THE INDUSTRY A LONG TIME. HE OBVIOUSLY MADE IT THROUGH THE PANDEMIC. HE OPENED IN 2021 AND MADE IT THROUGH. AND UM, HIS FINANCIALS ARE PRETTY CLEAN AND HE HAS A LOT OF STRENGTHS. UM, AS FAR AS LIKE HE'S GOT HIS EXPERIENCE, HIS SALES BEING UP PROJECTED CASH FLOW, BEING STRONG, UM, THE COLLATERAL COVERAGE IS LOOKING GOOD AND THE HIGH CREDIT. OKAY. I'M GOOD. YEAH. YEAH. I JUST, YOU KNOW, ASKED LIKE TO ASK QUESTIONS, POKE A FEW HOLES AND THEN THAT'S IT. . WELL I LIKE THE QUESTIONS. THIS IS BORING IF YOU'RE NOT ASK THE QUESTION. YEAH. THAT'S TELL WELL UH, MAKE A MOTION TO APPROVE. I'LL SECOND IT. WE VOTE. COMMISSIONER MATOYER? UH, YES. COMMISSIONER LARKINS. COMMISSIONER COLLINS. YES. MOTION TO APPROVE. PERFECT. OKAY. YAY. THAT'S GREAT. ALRIGHT, NOW MOVING ON TO ITEM NUMBER THREE, WHICH IS A RECOMMENDATION TO APPROVE THE REVOLVING LOAN APPLICATION IN THE AMOUNT OF 75,000 FOR GABRIELA RA GP DOING BUSINESS AS RA'S AUTO BODY LOCATED AT 1493 CORTA AVENUE, LONG BEACH, CALIFORNIA 9 0 8 1 3. YEAH. AND SO THIS ONE'S VERY SIMILAR. THIS GUY DOES MORE LIKE BODY WORK THOUGH, RIGHT? SO WHEN AFTER YOU GET INTO A COLLISION AND YOU'RE FIXING UM, YOU KNOW, THE ACTUAL AUTO BODY, HE ALL, HE DOES DO AUTOMOTIVE REPAIR OF THE ENGINE AS WELL, BUT IT'S A LOT MORE THE BODY WORK OF THE CAR. UM, SO SIMILAR, THIS IS A HUSBAND AND WIFE, UM, BUSINESS. THEY HAVE A GENERAL PARTNERSHIP, GABRIELA A AAND GP. UM, THEY DO HAVE A LONG HISTORY THOUGH. THEY STARTED UM, BACK IN UH, 2009 AS A SOLE PROPRIETOR UNDER THE NAME ACE OF PAINTS. UM, THEY THEN CHANGED THEIR FICTITIOUS BUSINESS NAME TO AL'S AUTO BODY IN 2013. AND THEN THAT SAME YEAR THEY GOT AN EIN NUMBER FROM THE IRS AND THEN THEY FORMED THEIR GENERAL PARTNERSHIP IN 2018. UM, AND THEY'VE MAINTAINED THAT SAME FICTITIOUS BUSINESS NAME. UM, SO MOSTLY THEY SPECIALIZE YEAH. IN AUTO BODY REPAIR AND PAINTING. SO THEY HAVE A BIG PAINT THING AND HE ACTUALLY JUST GOT A NEW CONTRACT TO DO LIKE 20 CARS A MONTH OF LIKE THE PAINTING, WHICH IS GONNA BE SOME GOOD REVENUE FOR HIM. OR IT WAS, I THINK IT WAS $20,000 A MONTH. I DON'T KNOW HOW MANY CARS ACTUALLY THAT TRANSLATES TO. BUT SO THEY, THEIR PAINTING IS THEIR SPECIALTY. THEY'RE ALSO LOOKING FOR UM, EQUIPMENT. THAT'S WHAT THE LOAN REQUEST IS FOR. UM, WE ACTUALLY ALL FOUR OF US, UM, CARLA AND I AND JESSICA AND COLTON ALL WENT OUT THERE ACTUALLY. WERE YOU THERE, JESSICA? YOU WERE? NO, YOU WERE THERE. COLTON WAS THERE. COLTON, THE THREE OF US WENT OUT TO THE LEFT SIDE AND MET THEM UM, MANY MONTHS AGO. IT'S TAKEN QUITE SOME TIME TO WORK WITH THEM. THEIR PAPERWORK IS NOT NEARLY AS IN GOOD OF SHAPE. MM-HMM. UM, JUST, YOU KNOW, ALL HONESTY THERE. MM-HMM . UM, BUT WE ARE HERE NOW FINALLY WITH THIS AND THEIR UM, THEIR SPOT IS REALLY COOL. THEY'VE BEEN THERE FOR A LONG TIME. SO DESPITE THE NAME CHANGES AND LIKE THEM INCORPORATING, THEY'VE ALWAYS HAD THAT SAME LOCATION. UM, AND IT'S VERY MUCH A FAMILY BUSINESS. UM, BUT THEY'RE NEW EXPANSION PLAN IS TO GET THIS UM, PRETTY EXPENSIVE UM, DIAGNOSTIC EQUIPMENT. UM, THEY'RE ALSO LOOKING FOR A FRAME AS WELL, LIKE A TOWER FRAME, LIKE A LIFT. UM, BUT THE DI DIAGNOSTIC EQUIPMENT IS TO HELP THEM WORK ON UM, TESLAS AND LIKE ELECTRONIC VEHICLES. UM, BECAUSE THERE'S DIFFERENT, LIKE WHEN YOU'RE LIKE WHEN IT GETS INTO ACCIDENT OR YOU IN A COLLISION, IT CHANGES THE ELECTRONICS OF THE CAR AND YOU HAVE TO LIKE RESET IT. YOU HAVE TO LIKE REBOOT THE WHOLE CAR AND YOU NEED THIS FANCY EQUIPMENT TO BE ABLE TO DIAGNOSE IT ELECTRONICALLY. SO IT'S NOT THE SAME. IT'S JUST LIKE FIXING THE BUMPER. MM-HMM. IN ORDER TO FIX THE BUMPER YOU GOTTA DO THIS DIAGNOSTIC THING. WHICH I WAS LIKE, OH GOD, TESLA [00:20:01] MADE IT SO COMPLICATED. BUT THEY'RE TRYING TO GET A CONTRACT TO WHERE THEY CAN UM, SERVICE TESLAS AND DO THAT KIND OF WORK. SO IS THAT RARE AROUND HERE? DIDN'T WE SAY THAT LAST TIME? OR WHAT, WHAT CONVERSATION WERE WE IN? THAT THERE'S NOT MANY, WHICH IS THAT'S WHICH IS GREAT. MM-HMM. . EXACTLY. THERE'S NOT MANY SHOPS LIKE THIS THAT CAN DO THAT. A LOT OF 'EM ARE GOING DIRECTLY TO THE MANUFACTURER RIGHT NOW. RIGHT. AND SO THIS WOULD BE AN ALTERNATIVE TO, TO BE ABLE TO GET THE CARS, I THINK SERVICED MORE A LITTLE BIT MORE CHEAPLY. RIGHT. A LITTLE MORE COST-EFFECTIVELY. BUT ALSO, YEAH, FOR ANYONE THAT DOESN'T WANT TO GO THROUGH THE DEAL MM-HMM. THEY'D BE LOOKING FOR A THIRD PARTY LIKE THIS. YEAH, EXACTLY. YEAH. AND SO IT'S KIND OF RARE AND SO THAT'S WHY WE'RE LIKE, OH IT'S A GREAT IDEA. MM-HMM. LIKE IT IS A VERY SMART BUSINESS DIVERSIFICATION, YOU KNOW, MODEL I THINK. SO THAT'S SETTING ONE OF THE STRENGTHS IS THEY KIND OF DO UP THEIR PULSE ON WHAT'S HAPPENING IN THE MARKET AND TRYING TO EVOLVE, YOU KNOW, THEIR BUSINESS OVER TIME. UM, THE, SOME OF THE, LET'S SEE WEAKNESSES, THEY HAVE PRETTY GOOD, UM, COLLATERAL COVERAGE AS WELL, 1.57. UM, THEY HAVE SOME EXISTING EQUIPMENT AND THEY DON'T HAVE ANY EXISTING, UH, LOANS RIGHT NOW. UM, THEY'RE PRETTY DEBT ADVERSE FOLKS, RIGHT. THEY DON'T, UM, OWN A HOME. THEY DON'T HAVE ANY AUTO LOANS. THEY HAVE VERY LITTLE CREDIT THAT THEY'VE ACTUALLY UTILIZED. UM, SO THAT'S WHY I ALSO THINK THERE IS SOME PROBABLY HIDDEN CASH FLOW GOING ON WITH THIS BUSINESS TOO. . UM, BUT THEIR SALES ALSO HAVE BEEN INCREASING, UM, OVER TIME. THEY DON'T HAVE QUITE AS HIGH SALES AS THE PREVIOUS COMPANY. AS YOU CAN NOTICE THEY WERE LIKE AT TWO 50 K, I MEAN SOMEWHAT SIMILAR. I THINK THE OTHER COMPANIES STARTED, UH, IS GROWING A LITTLE BIT MORE RAPIDLY. AND I THINK THAT'S BECAUSE THEY DO MORE OF THE ENGINE WORK, WHICH IS PRETTY COSTLY. UM, AND I THINK BECAUSE THEY'RE KIND OF SPECIALTY IN THE AUTO BODY WORK AND THEY'RE WORKING WITH INSURANCE COMPANIES A LOT OF TIMES THAT'S WHY THEY'RE LOOKING TO KIND OF DIVERSIFY AND FIGURE OUT MORE DIFFERENT CONTRACTS THAT THEY CAN GET. DID YOU NOTICE, UH, OTHER BODY SHOPS IN THE AREA WHEN YOU WERE BY ANY CHANCE WHEN YOU WERE DOWN THERE? MM, WE DIDN'T SEE. IT WAS ALONG THE CORRIDOR THOUGH IN SANTA FE. RIGHT. LIKE WHERE IT'S KIND OF CHEAPER. RIGHT. WHERE THEY WOULD HAVE AUTO SHOP. YEAH. UM, BUT I DON'T THINK THERE'S ANYTHING STORE. NO, THERE WASN'T. THERE WAS NOT. YEAH. NO CLOSE BY. UM, YEAH. SO AGAIN, THEY'VE BEEN IN BUSINESS SINCE OH NINE. THEY HAVE ABOUT 20 YEARS OF EXPERIENCE. THEIR SALES, UM, HAVE INCREASED BY MORE THAN 80% SINCE THEY STARTED. UM, THE CASH FLOW IS STRONG, UM, FOR UH, THE 2022 YEAR END. SO THEY ARE SHOWING CASH FLOW, WHICH IS GOOD. UM, THE OTHER ONE WAS SHOWING LOSSES. THIS ONE HAS VERY LITTLE ON THE BOTTOM LINE, BUT UM, IT IS CASH FLOWING POSITIVELY. UM, AND THEY HAVE A REALLY LOW DEBT TO EQUITY RATIO SINCE THEY HAVE NO EXISTING DEBT. UM, THEIR PERSONAL CREDIT IS, I'D SAY LIKE BORDERLINE. RIGHT? USUALLY SIX 50 AND ABOVE IS LIKE WHAT WE'RE LOOKING FOR. SHE LITERALLY HAS A 6 52 . I THINK IT'S BECAUSE THEY DON'T UTILIZE THEIR CREDIT VERY MUCH. UM, AND THEY DID HAVE A COUPLE DIFFERENT BLEMISHES I THINK THAT I REFERRED TO IN THE WRITEUP. THEY HAD A COUPLE LATE PAYS AND THERE WAS UM, WAS THE FIRST SPECIAL, YES, THERE WAS AN IDENTITY THING. HE WAS SHOWING, UM, YEAH, A COLLECTION ACCOUNT, WHICH $575 $74 IS NOT HUGE AMOUNT. BUT HE IS SAYING BASICALLY IT'S NOT HIM AND THAT HE CHECKED WITH SPECTRUM AND EVERYTHING'S UP TO DATE AND HE HAS AN ACCOUNT WITH THEM. UM, HIS NAME IS FAIRLY COMMON. UM, I WOULD SAY, UH, IT'S HARD TO TELL. SO HE DID REPORT THAT BACK TO THE CREDIT AGENCY. UM, AND HE CAME BACK UNSCORED. UM, AND SO HE IS IN THE PROCESS ALSO OF GIVING HIS GREEN CARD. SO HE UM, IS NOT A US CITIZEN, BUT GABRIELA IS, AND THE RULE FOR EDA IS THAT THE BUSINESS HAS TO BE OWNED 51% OR MORE BY A CITIZEN OR LEGAL PERMANENT RESIDENT. SO HOW DOES THAT AFFECT, SO THIS IS, IT'S, IT QUALIFIES. HE'S, THEY'RE, THEY'RE ELIGIBLE, UM, TECHNICALLY, BUT I THINK THAT'S ALSO WHY HE HAS AN UNSCORED CREDIT. IT'S HARD. HE JUST DOESN'T HAVE A LOT OF FINANCIAL HISTORY BECAUSE OF THAT. BUT THEY ARE ACTIVELY IN THE PROCESS OF GETTING THE GREEN CARD. UM, AND SO THEY'VE BEEN WORKING ON THAT FOR QUITE SOME TIME AS YOU CAN PROBABLY IMAGINE. BUT IT SOUNDS LIKE THEY'RE GETTING CLOSER. THEY HAVE A, LIKE A LAWYER, UM, THAT THEY'VE BEEN WORKING WITH. UM, DO THEY HAVE TO REPORT THAT TO YOU BY, JUST SO YOU KNOW THEIR STATUS OR, UM, OR DOES IT NOT MATTER? WE, IT'S A LITTLE BIT OF A GRAY AREA, SO WE'RE NOT TRYING TO LIKE, YOU KNOW, WE'RE NOT OR ANYTHING. NO, THAT'S NOT WHAT I'M SAYING. I'M JUST LIKE, [00:25:01] BUT THEY DO HAVE TO, THEY DO HAVE TO BE, LIKE I SAID, THEY HAVE TO HAVE LEGAL PERMANENT RESIDENCE STATUS OR BE A CITIZEN. AND SO IF, UM, SO I DID ASK THEM AND THEY SAID NO THEY'RE NOT. AND THAT'S WHAT I NOTICED. MM-HMM. ALSO, UM, USUALLY WHEN YOU HAVE AN INTERIM TAX ID NUMBER, THE IT NUMBER STARTS WITH A NINE AND ALL OTHER UM, SOCIAL SECURITY NUMBERS START WITH LIKE A SIX, A SEVEN, ZERO OR ONE FROM WHAT I'VE SEEN. SO I COULD KIND OF TELL. UM, AND THAT'S JUST FROM KNOWING. BUT UM, YEAH. AND THEN WE GOT INTO IT AND THEY SENT ME SOME PAPERWORK ON HIM, YOU KNOW, GETTING, TRYING TO GET THE GREEN CARD AND WITH THE LAWYER. UM, AND THEN WE WERE VERIFYING HER OWNERSHIP AND THE GENERAL PARTNERSHIP. WE DID ALREADY COLLECT THE ARTICLES OF ORGANIZATION FOR THAT TO CONFIRM. UM, AND YOU KNOW, LOOKED AT WHAT THEY FILED WITH THE SECRETARY OF STATE, THAT KIND OF THING TO MAKE SURE THAT, UM, THE WAY THAT THEY ARE ORGANIZED IS, YOU KNOW, MEETS THE STANDARDS OF ELIGIBILITY FOR EDA MM-HMM. . UM, SO THEY DON'T HAVE TO LIKE DISCLOSE. WE HAD ANOTHER ONE THAT WE WERE FINALLY ABLE TO DO AN EMERGENCY LOAN WITH THAT HAD, THEY WERE 50 50 AND THE HUSBAND WAS ALSO UNDOCUMENTED. AND THEN WE FINALLY, HE FINALLY GOT HIS GREEN CARD AND WE WERE ABLE TO CLOSE THE LOAN BUT WE WERE LIKE STALLED OUT FOR A WHILE TRYING TO WORK WITH THEM. MM-HMM. AND SEE WHAT WE COULD DO. SO AGAIN, THE FUNDS HAVE BEEN DE FEDERALIZED SO THEY'RE NOT GONNA UM, LIKE CALL THE LOAN OR LIKE, YOU KNOW, DO ANYTHING. YOU DON'T HAVE TO ACTUALLY REPORT, BUT THEY'RE TRUSTING YOU TO FOLLOW THAT RULE. HMM. UM, 'CAUSE IT IS FEDERAL FUNDING. RIGHT. SO, SORRY, JUST TO BE CLEAR THEN, UH, THE WIFE THEN IS 51% IN THE BUSINESS? SHE'S 70%. SHE'S 70% IN THE GENERAL PARTNERSHIP. GOT IT. THANK YOU. SO THEY'RE GENERAL PARTNERSHIP. UM, AND THE GP, WHEN YOU'RE A GP, UM, AND YOU'RE A MARRIED COUPLE, YOU CAN STILL, YOU DON'T HAVE TO FILE ON THE 10 65 PARTNERSHIP RETURN. YOU CAN ELECT TO STILL FILE ON UM, YOUR SCHEDULE C. IT'S KIND OF LIKE A SINGLE MEMBER LLC. YOU HAVE A SEPARATE CORPORATE ENTITY AND YOU CAN FILE ON UM, A CORPORATE RETURN. MM-HMM. . BUT YOU DON'T HAVE TO, YOU CAN USE YOUR PERSONAL 10 40 RETURN AND STILL FILE ON THE SCHEDULE C, WHICH IS THE PROFIT AND LOSS OR A BUSINESS LIKE A SOLE PROPRIETOR WOULD DO. IT'S JUST A LITTLE EASIER. I REALLY ENCOURAGE THEM TO GET BETTER TAX HELP AND TO FILE. I THINK THEY SHOULD FILE THE PARTNERSHIP RETURN. THIS GUY OTHER GUY WAS FILING THE PARTNERSHIP RETURN AND IT'S JUST WAY CLEANER. MM-HMM. . YEAH. AND JUST GIVES YOU, IT GIVES YOU ANOTHER LEVEL OF DEDUCTIONS AND YOU CAN RELATE MORE EASILY SEPARATE OUT YOUR BUSINESS AND PERSONAL. YOU THINK THEY'LL TAKE YOUR ADVICE? I HOPE SO. I REALLY HOPE SO. WE HAMMERED IT HARD TO THEM. AND I THINK WITH BOTH OF THESE I WOULD RECOMMEND THAT BEFORE WE CLOSE, WE COLLECT THE NINE 30 NUMBERS. AGAIN, I'VE BEEN WORKING WITH THEM FOR QUITE SOME TIME AND WE REALLY WANTED TO GET THESE IN FRONT OF YOU, BUT BEFORE WE CLOSE, I THINK WE SHOULD COLLECT, UM, THE, THE MOST RECENT QUARTER END, WHICH WOULD BE Q THREE, ENDING NINE 30 JUST TO MAKE SURE THERE'S NO ADVERSE CHANGE. UM, YOU KNOW, THAT'S USUALLY WHAT IT IS. LIKE MAKE SURE THERE'S NO ADVERSE CHANGE IN THE FINANCIAL CONDITION OF THE COMPANY BETWEEN THE TIME THAT THEY WERE, UM, THE DATA THAT THEY APPROVED TO THAT THEY SUBMITTED TO GET APPROVAL. NOTHING HAS CHANGED BETWEEN THAT PERIOD OF TIME AND CLOSING. UM, 'CAUSE BY THE TIME WE CLOSE IT'S PROBABLY NOT GONNA BE, IT'LL BE CLOSE TO DECEMBER AND THAT'LL BE, YOU KNOW, FIVE MONTHS AFTER THEY SUBMITTED THEIR LAST FINANCIAL STATEMENT. SO YOU JUST WANNA MAKE SURE THAT WHEN YOU CLOSE YOU HAVE THE MOST UP TO DATE INFORMATION AND NOTHING HAS CHANGED IN THE MEANTIME. MM-HMM. . SO I WOULD SUGGEST THAT AS WELL. BUT I THINK SIX 30 NUMBERS ARE PRETTY GOOD AND AGAIN, WE JUST, YOU KNOW, WE'RE BARELY, USUALLY YOU GIVE SOMEBODY 30 DAYS FROM THE LAST QUARTER ENDS. SO AT THE END OF THIS MONTH WOULD BE THE 30 DAYS THAT YOU COULD REQUEST THOSE, THOSE UPDATED STATEMENTS, WOULD THAT NEED TO BE PART OF THE MOTION TO ASK OR IS THAT SOMETHING THAT YOU CAN, YOU CAN WAIT RIGHT AND GET SOME, YEAH, YOU CAN MAKE A CONDITION OF APPROVAL. OKAY. MM-HMM. FOR SURE. UM, THE CLOSING PROCESS TYPICALLY DOES JUST INCLUDE THAT. GOT IT. BUT FOR THESE GUYS I WOULD SAY IT WILL BE A GOOD CONDITION TO INCLUDE. OKAY. WELL DO YOU HAVE ANY OTHER QUESTIONS? NO, JUST ONE STATEMENT, WHICH IS GREAT. I MEAN OBVIOUSLY I LOOKED UP THE LOCATION SO IT'S NICE THAT YOU'VE GOT A WEST SIDE AND A CENTRAL BUSINESS 'CAUSE WE'VE DONE OTHER PARTS OF TOWN. MM-HMM. . SO NOW THE PROGRAM IS SPREADING OUT. YEAH. SO I THINK IT HITS A LOT OF GOALS HERE. RIGHT. THAT'S GOOD. YES. MM-HMM. . YEAH. AND THEY'RE BOTH MINORITY OWNED AND AGAIN THE JOB CREATION REQUIREMENT, I THINK THESE ARE, YOU KNOW, THESE ARE UM, SOLID, YOU KNOW, BLUE COLLAR JOBS I'D SAY. YOU KNOW, UM, ESPECIALLY FROM THE WEST SIDE TOO. I MEAN ESPECIALLY IF SOMEONE GETS INJECTED WITH SOME FINANCES TO TRY TO GROW, YOU KNOW? MM-HMM. . EXACTLY. MM-HMM. . IS IT JUST COINCIDENCE THAT THE LOAN AMOUNTS ARE THE SAME AND THEY BOTH ASK BROKEN DOWN IN KIND OF SIMILAR FASHIONS? UM, WELL SO IF YOU LOOK AT THE WAY THE EQUITY AND STUFF IS BROKEN DOWN, THAT'S COMING FROM THEIR BALANCE SHEET. SO, UM, THERE'S ABOUT 85 K IN EQUITY THAT, THAT THE [00:30:01] AAND HAS PUT IN. AND SO THAT YOU CAN SEE IS LIKE OVER TIME HOW MUCH MONEY THAT THEY'VE INJECTED INTO THE COMPANY. RIGHT. YEAH. AND THAT WOULD, THAT WOULD KIND OF UM, REPRESENTS THEIR INVESTMENT IN THE INITIAL EQUIPMENT RIGHT. AND ASSETS THAT THEY HAVE ON THEIR BALANCE SHEET. UM, THEY BOTH ASKED FOR EQUIPMENT LOANS OVER LIKE CLOSE TO A HUNDRED K OR OVER AND I WAS LIKE EH. AH, OKAY. SO LOOKING AT THE EQUIPMENT AGAIN, I MADE THEM SUBMIT ALSO TO ME AND UM, A BID. RIGHT? OR LIKE AN ESTIMATE. YEAH. THEY SUBMITTED LIKE A LITTLE INVOICE OF WHAT THE EQUIPMENT IS SO I COULD KIND OF LOOK INTO IT, VERIFY THE COST OF IT, THAT KIND OF THING. UM, THEY'RE ASKING FOR DIFF SIMILAR YEAH. DIFFERENT TYPES OF EQUIPMENT. YEP. WHICH I THINK MAKES SENSE TO THEIR BUSINESSES 'CAUSE IT'S MORE SPECIALIZED THERE. UM, BUT THEY WERE ASKING FOR MORE AND GIVEN THE STATE OF THEIR COMPANY HOW LONG I WAS WORKING WITH 'EM, I WAS LIKE, YOU KNOW, LET'S DO 75 , JUST LOOK AT THE CASH FLOW AND ALL THAT. SO THE REQUEST WAS REDUCED FOR BOTH OF 'EM. GOT IT. MM-HMM. . UM, BUT YEAH, IT'S JUST KIND OF FUNNY 'CAUSE GABRIELA UH, WE'VE BEEN WORKING WITH HER FOR QUITE SOME TIME. WE MET WITH 'EM LIKE MORE THAN SIX MONTHS AGO WHEN WE WENT OUT THERE AND DE LEONE JUST CAME THROUGH THE ONLINE SYSTEM, UM, IN THE LAST COUPLE MONTHS AND WE WERE ABLE TO TURN OUT REALLY QUICKLY AGAIN, HIS LADY LUCY, I LOVE HER. SHE'S VERY SWEET, SHE'S SUPER PROFESSIONAL AND SHE DOES HIS TAXES VERY WELL. SHE KNOWS WHAT SHE'S DOING. YOU CAN TELL RIGHT AWAY JUST BY LOOKING AT THE FINANCIAL STATEMENTS. AND IT TOOK A LONG TIME TO GET PAPERWORK FROM THESE GUYS. ACTUALLY. HE ACTUALLY CAME TO THE BEST CARE HOTLINE I BELIEVE OF DEION. MM-HMM. . SO YEAH, IT'S JUST KIND OF COINCIDENCE, BUT YEAH. KIND OF INTERESTING , BUT PEOPLE ALWAYS NEED WORK ON THEIR CAR. PEOPLE ALWAYS GET AN ACCIDENT SO I COOL. ALRIGHT, WELL I'LL MAKE THE MOTION, UM, AND INCLUDE A CONDITION FOR THEM TO PROVIDE THE THIRD QUARTER FINANCIAL STATEMENTS. THANK YOU. THIRD QUARTER FINANCIAL STATEMENTS. SECOND. THANK YOU. . IT DOES, RIGHT? I CAN PAIR WORDS. YEAH. AND LET ME KNOW IF YOU GUYS HAVE ANY FEEDBACK ON THE REPORTS. IF THERE'S MORE INFORMATION YOU WANNA SEE LESS IF YOU LIKE IT MORE SUMMARIZED, I DON'T KNOW. THIS IS NO, YOU DID A GOOD JOB OF PRESENTING AND, AND UH, MAKES IT EASIER TO ASK QUESTIONS AND YEAH. UM, THE GOOD NEWS IS BECAUSE YOU HAD REDUCED IT, IF THERE WERE ANY MAJOR DEFAULT WHATNOT, IT'S NOT LIKE YOU LOANED $500,000. EXACTLY. THAT'S USUALLY WHAT YOU DO. WHEN THE RISK IS A LITTLE HIGHER, YOU'RE LIKE, OKAY, WE'LL DO IT, BUT WE'RE GONNA REDUCE THE AMOUNT. YEAH. YOU KNOW, JUST TO LOWER THE RISK INVOLVED AND YES, THEY CAN I THINK STILL MAKE IT HAPPEN. THEIR GOALS, LIKE FOR THIS NUMBER, AFTER I LOOK AT THE EQUIPMENT AND KIND OF ANALYZE HOW MUCH EQUIPMENT THEY ALREADY HAVE, WHAT THEIR CASH FLOW IS, I FEEL LIKE THEY CAN MAKE SOME SUBSTANTIAL EXPANSIONS, YOU KNOW, WITH THIS AMOUNT. OF COURSE EVERYONE ALWAYS ASKS FOR MORE AND THEY KNOW THAT IT USUALLY DOES GET REDUCED SOMEWHAT. UM, BUT YEAH, IT WAS BASED ON THE RISK. UM, AND I WAS LIKE, WELL, YOU KNOW, THEY'RE VERY SIMILAR SO WE SHOULD PROBABLY DO, WE SHOULD TO KEEP A STANDARD, WE SHOULD MAYBE JUST DO THE SAME AMOUNT FOR BOTH OF 'EM BECAUSE I WOULD SAY THE CREDITS ARE SUBSTANTIALLY SIMILAR. UM, NOT ONLY THE, UM, THE INDUSTRY THAT THEY'RE IN, BUT LIKE THE QUALITY OF THE CREDIT. UM, I, I THINK DAY LOAN IS SLIGHTLY, UM, STRONGER. BUT HONESTLY LIKE IF WE, THERE'S A SCORING SYSTEM THAT SBA USES, LIKE THEY WOULD SCORE VERY SIMILAR. OKAY. BASED ON LIKE COLLATERAL COVERAGE, CASHFLOW COVERAGE AND THE PERSONAL GUARANTEE. MM-HMM. LIKE PERSONAL CREDIT. OKAY. MM-HMM. . UM, WHO'S CALLING FOR VOTE? SORRY. THEY JUST, THEY CALL IT THEY THEY MOTION BUT WE NEED TO FINALIZE FOR THE VOTE. OKAY. COMMISSIONER MATOYER? YES. COMMISSIONER LARKINS. COMMISSIONER COHEN. YES. MOTION CARRIES. OKAY. AWESOME. ALRIGHT, SO NOW THAT CONCLUDES THE, UH, ITEMS FOR THE AGENDA AND THEN WE'LL MOVE TO PUBLIC COMMENT. I DON'T SEE ANY PUBLIC COMMENTS, ANY, SO WE'RE GOOD THERE. SO THE PUBLIC HERE TODAY, SO YEAH. ANY ANNOUNCEMENTS FOR THE COMMISSIONERS? NO. ARE WE HAVE KINDA A MEET AGAIN? HOPEFULLY . OKAY. JUST ASKING. AND SO AGAIN, WE'RE GONNA TRY TO DO THIS NEXT TIME YOU GUYS HAVE A COMMISSION MEETING, WE'RE GONNA TRY TO PIGGYBACK ON THAT 'CAUSE WE DO HAVE A FEW MORE. WHEN AMPING THE PIPELINE, WE'RE GOING FULL STEAM. UM, WE CAN GIVE AN UPDATE ON THE ED APPLICATION NEXT TIME. OKAY. ALRIGHT. WE'RE STILL WORKING ON THAT. SO HOPEFULLY. AND OUR PORTFOLIO. AND OUR PORTFOLIO. AND THE PORTFOLIO. YEAH. GOOD. WE'LL PUT THAT ON THE AGENDA AGAIN FOR NEXT TIME. UM, BUT DID YOU GUYS MEET ON THE 20TH? DID YOU GUYS DO THE LITTLE NO. RETREAT OR WHATEVER CANCELED? WHAT YOU GOT CANCELED? NO, THE ONE FOR THIS MONTH WAS CANCELED. OH, OKAY. THAT'S WHAT I THOUGHT. BUT WE DID THAT, WE DID THE, UM, RETREAT AT, UH, PACIFIC GATEWAY BUILDING. OH, OKAY. OR IT WAS A SITE VISIT OR SOMETHING. I FORGET. I TALKED TO VIVIAN, UM, AT ANOTHER EVENT AND SHE SAID THAT YOU GUYS WERE GONNA MEET ON [00:35:01] THE 20TH, BUT IT WASN'T LIKE A REGULAR MEETING. YOU WERE GONNA GO I THINK THERE WAS A A, IT WAS SOME KIND OF RETREAT PLAN. YEAH, BUT I DON'T THINK IT OKAY. THAT'S DIFFERENT THAN THE UH, WHEN YOU GUYS WENT AND THEN YOU GUYS ALREADY DID A RETREAT AS WELL'S. THE THING WE ALREADY DID A SPECIFIC GATEWAY. YOU WERE GONNA DO ANOTHER ONE. ANOTHER ONE, BUT IT GOT CANCELED. . OH, I HAD NO IDEA. I THOUGHT IT WAS A REGULAR MEETING. YEAH, I THOUGHT IT WAS. I DIDN'T EVEN REALIZE IT GOT CANCELED. IT WAS LIKE, I THINK THERE WAS SOMETHING ON MY, IT WAS SUPPOSED TO BE LAST WEEK. YEAH. OKAY. OCTOBER 20TH. YEAH. AND SO CHAD WAS LIKE, HE WAS POSTED ON WHEN IT IS THOUGH BECAUSE WE ARE GONNA TRY TO MEET. YEAH. WE'LL LET YOU GUYS KNOW. YOU CAN TAKE THE MINUTES BUT WE'LL COLLECT. OH YEAH, SORRY. WE CAN ADJOURN. I THINK WE NEED A MOTION TO AURN. OH YES WE DO. AND WE JUST NEED AN OFFICIAL CALL ME TO ADJOURN. SO MOVED. WE NEED ADJOURN. THANK YOU GUYS SO MUCH. OF COURSE. * This transcript was created by voice-to-text technology. The transcript has not been edited for errors or omissions, it is for reference only and is not the official minutes of the meeting.