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ELK RIVER ECONOMIC DEVELOPMENT <br />MICRO LOAN FUND POLICY & GUIDELINES <br />~" Draft Pcbnr ~ 311116 D!I!tld: Revisedlwe ]1104 <br />PURPOSE Formatted: superscript <br />The Economic Development Authority for the City of Ells River (EDA) recognizes <br />the need to stimulate private sector investment into manufacturing facilities and <br />equipment in order to create new jobs, boost productivity and retain existing jobs fox <br />local residents. Additionally, the need exists to encourage investment in the <br />expansion and/ox rehabilitation of commercial and retail buildings in order to <br />maintain the economic viability of Elk River's Downtown llistrict Subsequently, oersted: rentd business a~sr.;<t <br />the purpose of this program is to provide low interest, long-term (i.e. greater than <br />one year) loans as incentives for industrial development within the City of Elk River <br />and to encourage commercial and retail business owners in the Downtown District - celeted: aneai bns;ne~e dams <br />to rehabilitate their existing buildings. <br />11. LOAN PROGRAMS <br />In order to meet the economic and commurnty development objectives of the EDA, <br />two distinct loan programs exist within the Micro Loan Fund to promote business <br />growth in Elk River. <br />Industrial Incentive Program <br />Purpose: The purpose of the Industrial Incentive Program is to encourage <br />industrial development that supports the tax base and brings quality <br />jobs to the city. <br />Amount: Up to $lOQ,000 of secondary financing not to exceed 20% of the <br />project cost. <br />Equity: Must have private-sector commitments for 50% of the project cost. <br />Borrower to provide ]0% ox more of project financing. <br />Rate: Fixed; 2 points below the lowest prime rate published in <br />the Wall Street Journal the day the loan is closed, or 3%, whichever is <br />greater. <br />Term: Financing with a balloon payment inr5-years. The balloon payment _ celeted: °P m <br />must not be longer than the balloon payment of the participating <br />bank. Loans may be amortized up to the following limits: <br />-years on real estate uses; oekted: is <br />10-years on equipment uses. <br />Extension: In the event that the Borrower is unable to obtain conventional cekted: ~ iseal°ne zow <br />financing to replace the Micro Loan at the end of five years, the loan <br />Formatted: Superscript <br />Elk River Economic Development Authority Pate 2 of t5 <br />Micro Loan Fund Policy & Guidelines <br />.L" Urafr Pr~b a aq 3006 , <br />