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• If Borrower defaults on the loan, the EDA will collect all further payments <br />during the default based on a pro-rata basis with the participating bank <br />excluding the distribution of proceeds resulting from the foreclosure on <br />collateral. <br />The EDA may require additional agreements to be signed by the borrower (i.e. <br />security agreement, personal guazantees, subsidy agreement). <br />2. Simultaneous Micro Loans <br />The simultaneous use of different Micro Loan Fund Programs by any one borrower <br />ox fox any one project is prohibited. <br />3. Call of Loan <br />A loan shall become due and payable in full if a business relocates outside of the city <br />of Elk River prior to the maturity date of the loan. <br />4. Late Payment Charge <br />A late payment chazge of 8% of the installment amount may be enforced. <br />VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS <br />All buildings which public funds will be used for construction ox renovation axe to <br />be brought into conformance with city ordinances and state building codes. Repairs <br />may include the following systems and portions of real property: <br />a. Mechanical heating, plumbing, and electrical <br />b. Structural; including the facade of the structure and energy related <br />improvements. <br />c. Hook-up to city services (i.e. water, sewer) <br />d. ADA (Americans with Disabilities Act) improvements <br />VII. LOAN SECURITY AND GUARANTEES <br />Applicant must be able to secure the loan by providing the EDA with a minunum of <br />a subordinate mortgage upon the building and/ox assets or other approved collateral. <br />Applicant must demonstrate the financial means to repay the loans, as determined by <br />the Economic Development Authority. <br />Whenever possible, personal guarantees will be made part of any loan agreement. <br />VIII. TIMING OF PROJECT EXPENSES <br />No project should commence until the Elk River Economic Development Authority <br />has approved the loan application. Any costs incurred prior to the approval of the <br />loan application axe generally not eligible expenditures. <br />No building construction should commence until the required Ciry permits are <br />secured. <br />Micro Loan Fund Policy & Guidelines Page 5 of 14 <br />Amended May 2006 <br />