6. EDSR 05-09-2011 - Laserfiche WebLink

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V. MICRO LOAN FUND TERMS & CONDITIONS Loan Structure All Economic Development Micro Loans shall be structured as participation loans and serviced by the project's primary lending institution, rather than as a direct loan, unless otherwise approved by the EDA Finance Committee. Such an arrangement allows for the central distribution and collection of funds and simplifies the financing process for all parties involved. A participation agreement will be signed by the borrower, primary lender and the EDA. The EDA may require additional agreements to be signed by the borrower (i.e. security agreement, personal guarantees, business subsidy agreement). Simultaneous Micro Loans The simultaneous use of different Micro Loan Fund Programs by any one borrower or for any one project is prohibited. Call of Loan A loan shall become due and payable in full if a business relocates outside of the city of Elk River prior to the maturity date of the loan. Late Payment Charge A late payment charge of 8% of the installment amount maybe enforced. VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS All buildings which public funds will be used for construction or renovation axe to be brought into conformance with city ordinances and state building codes. Repairs may include the following systems and portions of real property: a. Mechanical heating, plumbing, and electrical b. Structural; including the facade of the structure and energy related unprovements. c. Hook-up to city services (i.e. water, sewer) d. ADA (Americans with Disabilities Act) improvements VII. LOAN SECURITY AND GUARANTEES Applicant must be able to secure the loan by providing the EDA with a minimum of a subordinate mortgage upon the building and/or assets or other approved collateral. Applicant must demonstrate the financial means to repay the loans, as determined by the Economic Development Authority. Whenever possible, personal guarantees will be made part of any loan agreement. Key person life insurance maybe required as determined by the EDA Finance Committee based on loan amount and company ownership partners. Micro Loan Fund Policy & Guidelines Page 6 of 15 Amended May 2011