All projects, except for certain grants, will be selected on a merit basis and according to the Sheep Center's goals. Bond issues will be evaluated using the same criteria as guaranteed loans. Noncompetitive grants may be approved by the Board for supplementing certain loans and guaranteed loans and be in accordance with 7 C.F.R 3015.158. The applications will be evaluated according to the selection criteria listed below. The Board evaluates the applications based on five specific areas:

1. FINANCIAL FEASIBILITY. Is the project financially feasible? Can the business stand on its own? Will the proposed project stimulate the sheep and goat industries? Are the projects' financial claims achievable? Does the project have a reasonable timeline?

2. BUSINESS SOUNDNESS. Is the business proposal sound? What other financial backing is available? Are the funding requirements defined? Is the business plan adequate? What is the likely share of the market the product could expect to capture? Has the marketing strategy been adequately developed? Has the applicant successfully evaluated the competition?

3. MANAGEMENT ABILITY. Is the management team capable of implementing the project. Is the program team aware of the financial, managerial, technical and other resources needed to successfully complete the project they are proposing? Is the team aware of regulatory obstacles? Have key milestones been identified?

4. POTENTIAL INDUSTRY IMPACT. How much of an impact will the project have on the sheep and goat industries? What is the potential market size? How much volume of product will the proposed project effect? Will the impact be local, regional, national or international? What impact will this project have on the sheep or goat industry if it is successful? How much value does the project add to the product? How much of the value-added to the product will be realized at each step of the marketing chain?

5. INDUSTRY COMMITMENT--What is the commitment of the producers, processors, end-users or other involved parties in participating in the proposed project? This may include, but is not limited to, individual producers, producer groups, processors, seminar participants, local organizations, local or state governments or trade associations. Is there a commitment from all who are expected to participate and benefit from the proposed project?

6. OVERALL IMPACT. What are the overall strengths and weaknesses of the proposed project?

The Board, or intermediary, may also take into account the geographic distribution of the sheep and goat populations in determining the geographic distribution of funds. In addition, the Center should cooperate fully with appropriate State, regional, and local agencies to ensure support of their strategies for development of the sheep or goat industries.

Some projects may request more than one type of assistance. If the project requires a guaranteed loan or loan and a grant, the project will be evaluated using the selection criteria for guaranteed loans. If the project combines guaranteed loans or grants with other types of assistance, each segment of the project will be evaluated according to the type of assistance. Then, the Board will make a decision whether to fund the project as a whole.

1. Goal fulfillment Preference will be given to projects whose purposes will serve to further one or more of the Center's stated goals of (a) making capital available for increasing production or improving production efficiency; (b) improving marketing efficiency or product quality; (c) promoting coordination; (d) enhancing communication; and (e) ensuring the continued viability of the Center.

2. Emphasis Projects will be evaluated on (a) the probability of the project's success and probability of increasing the value of the Center's equity investment, (b) the likelihood that the project will effectively commercialize a new product or process, (c) the ability to more efficiently provide a product or process currently existing, or (d) the likelihood that the Center will receive royalties or fees as a result of the project and time frame in which it may receive them.

3. Administrative Consideration will be given to (a) project's probability of success, in a stated time frame; (b) whether the project may benefit both the sheep and goat industries; (c) the applicant's experience, organizational skills, background, and financial strength to successfully carry out the project; and, (d) appropriateness of project budget for proposed activities.

1. Loan features Eligible lenders may submit loans for partial guarantee by the Center. It is the responsibility of the eligible lender to meet all requirements for making, procuring, servicing and collecting of the loan. Standard banking industry techniques will be used to judge credit worthiness such as (a) capital adequacy (equity as a percent of total assets); (b) debt service coverage (ratio of debt service to projected earning); (c) credit integrity (credit history); (d) stability (length of time the applicant has been in business, or a business closely related to the project); (e) rates (competitiveness of the rate at which the lender will price the loan); and, (f) percentage of guarantee (ratio of the amount of loan guarantee requested to the project's total loan amount and the proportion of the loan guarantee to the total project cost).

2. Goal fulfillment Preference will be given to projects whose purpose will serve to further the Center's stated goals of (a) making capital available for increasing production or improving production efficiency*; (b) improving marketing efficiency; (c) promoting coordination; (d) enhancing communication; and (e) ensuring the continued viability of the Center.

3. Emphasis Priority consideration will be given to applicants whose project (a) increases production or production efficiency*; (b) improves marketing efficiency; (c) commercializes high value, specialized sheep or goat products that command high prices; (d) provides new market for sheep, goats or their products; or (e) provides product or service previously unavailable to large segments of sheep or goat industries that enhances production or processing.

4. Administrative Preference may be shown to projects: with a higher probability of success; whose funding is matched by another entity or entities; that benefit both the sheep and goat industries; that more efficiently provide a product or process currently existing or where funds will be distributed beyond a single region of the U.S. Whether the applicant has received or will receive any other funding from the Center will also be taken into consideration.

*This is not intended to replace production services provided by other financial institutions or other government programs.

1. Loan features ; Standard banking industry techniques will be used to judge credit worthiness such as (a) capital adequacy (equity as a percent of total assets); (b) debt service coverage (ratio of debt service to projected earning); (c) credit integrity (credit history); (d) stability (length of time the applicant has been in business, or a business closely related to the project); and, (e) percentage of project cost (ratio of the amount of loan requested to the project's total project cost).

2. Goal fulfillment 9; Preference will be given to projects whose purpose will serve to further the Center's stated goals of (a) making capital available for increasing production or improving production efficiency; (b) improving marketing efficiency; (c) promoting coordination; (d) enhancing communication; and (e) ensuring the continued viability of the Center.

3. Emphasis Priority consideration will be given to applicants whose project: (a) increases production or production efficiency; (b) improves marketing efficiency; (c) commercializes high value, specialized sheep or goat products that command high prices; (d) provides new market for sheep, goats or their products; and (e) provides product or service previously unavailable to large segments of sheep or goat industries that enhances production or processing.

4. Administrative Preference may be given to projects: with a higher probability of success; whose funding is matched by another entity or entities; that benefit both the sheep and goat industries; that more efficiently provide a product or process currently existing; or to projects where funds will be distributed beyond a single region of the U.S. Whether the applicant has received or will receive any other funding from the Center will also be taken into consideration.

1. Goal fulfillment Preference will be given to projects whose purposes will serve to further the Center's stated goals of (a) making capital available for improving production efficiency; (b) improving marketing efficiency; (c) promoting coordination; (d) enhancing communication; and (e) ensuring the continued viability of the Center.

2. Emphasis Projects will be evaluated on (a) whether project studies and proposes a practical solution to a significant problem facing the sheep or goat industries; (b) the scientific, technical or economic merit of project design and concept in obtaining results of benefit to the sheep or goat industries; and, (c) the originality, creativity and innovativeness of project in solving a significant problem in the marketing or production of sheep, goats, or their products.

3. Administrative Consideration will be given to (a) project's probability of success, in a stated time frame; (b) whether the project may benefit both the sheep and goat industries; (c) the applicant's experience, organizational skills, background, and access to any facilities that are needed for applicant to successfully carry out the project; (d) appropriateness of project budget for proposed activities; (e) the proportion of total project cost provided by the applicant; and (f) the ability of the Center to have substantial involvement with the project.

Preference will be given to projects whose purposes will serve to further the Center's stated goals of (a) making capital available for increasing production or improving production efficiency; (b) improving marketing efficiency or product quality; (c) promoting coordination; (d) enhancing communication; and (e) ensuring the continued viability of the Center.

Projects will be evaluated on (a) the transferability or demonstration value that will help other parts of the industry outside of immediate project area; (b) the scientific, technical or economic merit of project design and concept in obtaining results of benefit to the sheep or goat industries; and, (c) the originality, creativity and innovativeness of projects in improving the marketing or production of sheep, goats, or their products.

Consideration will be given to (a) project's probability of success, in a stated time frame; (b) whether the project may benefit both the sheep and goat industries; (c) the applicant's experience, organizational skills, background, and access to any facilities that are needed for the applicant to successfully carry out the project; (d) appropriateness of project budget for proposed activities; and (e) the level of matching funds (if any) in relation to total project cost committed by other entities.

The Center may also make a grant to an intermediary or intermediaries to make direct loans, loan guarantees, cooperative agreements, equity investments, repayable grants, and grants to eligible entities who may lend monies in accordance with the Center’s Strategic Plan. A qualified intermediary must have (a) an interest in the NSIIC goals, mandates and the relative small size of the grant; (b) expertise with livestock production, processing or marketing related lending; (c) nationwide capability in urban and rural areas; and (d) the ability to process and service loans from all segments of the sheep and goat industries, from production through the packer, processor, and retail level.

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