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V. MICRO LOAN FUND TERMS & CONDITIONS <br /> Loan Structure <br /> All Economic Development Micro Loans shall be structured as participation loans <br /> and serviced by the project's primary lending institution,rather than as a direct loan, <br /> unless otherwise approved by the EDA Finance Committee. Such an arrangement <br /> allows for the central distribution and collection of funds and simplifies the financing <br /> process for all parties involved.A participation agreement will be signed by the <br /> borrower,primary lender and the.EDA. <br /> The EDA may require additional agreements to be signed by the borrower <br /> (i.e. security agreement,personal guarantees,business subsidy agreement). <br /> Simultaneous Micro Loans <br /> The simultaneous use of different Micro Loan Fund Programs by any one borrower <br /> or for any one project is prohibited. <br /> 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 /> Late Payment Charge <br /> A late payment charge 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 or renovation are 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 minimum of <br /> a subordinate mortgage upon the building and/or 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 /> Key person life insurance may be required as determined by the EDA Finance <br /> Committee based on loan amount and company ownership partners. <br /> Micro Loan Fund Policy&Guidelines Page 6 of 15 <br /> Amended May 2011 <br />