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III. USES <br />1. Permitted Fund Uses: <br />a. Building construction <br />b. Land acquisition <br />e Machinery <br />d. Furniture, fixtures, and equipment (FFBrE) <br />e. Renovation and modernization of buildings <br />f Exterior renovation of retail, commercial and industrial buildings <br />g. Public infrastructure needed for economic development expansions <br />h. Investment real estate with a minimum of 50% of the space pre-leased <br />2. Ineligible Fund Uses: <br />a. Expenditures for the construction and/or renovation of residential units <br />b. Working capital <br />c. Refinancing of existing debt <br />d. Inventory <br />IV. BUSINESSES ELIGIBILITY <br />Any project meeting the above criteria, and located or proposed to be located within <br />the city lirnits of Elk River as defined by this program, may be eligible for an <br />Economic Development Micro Loan as further defined herein: <br />• Business must be a fox-profit corporation, partnership, ox sole <br />proprietorship. <br />• Business must be a .rma!lbusiness as defined by the Small Business <br />Administration (SBA). <br />• Business must have a positive net worth. <br />• Religious, political, and pornographic enterprises are not eligible to use <br />the Economic Development Micro Loan Fund. <br />V. MICRO LOAN FUND TERMS & CONDITIONS <br />1. Loan Structure <br />All Economic llevelopment Micro Loans will be strucmxed as portidpation loans and <br />will be serviced by the project's primary lending insdmdon. Such an arrangement <br />allows for the central distribution and collection of funds and simplifies the fmanung <br />process fox all parties involved. A participation agreement will be signed by the <br />boaowex, primary lender and the EDA. The agreement will include the following <br />provisions, among others: <br />• If Borrower does not meet the job and wage goals specified in the Subsidy <br />Agreement, the interest rate will change to 2 points above the participating <br />bank's rate, effective from the two year anniversary of the loan closing. <br />Upon subsequent achievement of the jobs and wage goals, the interest rate <br />will revert back to the rate when the loan was originated, effective from the <br />date of attainment of the job and wage goals. <br />• If Borrower defaults on the loan, the EDA will collect all further payments <br />doting the default based on a pro-rata basis with the participating bank <br />Lak River Economic Development Authority Page 4 of 15 <br />Micro Loan Pund Policy & Guidelines . <br />.L Drift Pcbn ,ry 210i <br />- Dektetl: Eon <br />DellLed: Revrsed June 2007 <br />Formatted: Supetxript <br />