8. EDSR 04-08-2013 - Laserfiche WebLink

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A forgivable loan cannot be made solely on a finding that the conditions in clause 6.) or 7.) exist. A finding must be made that a condition in clause 1.),2.),3.),4.),or 5.) also exists. Forgivable loans are awarded to businesses that meet all project and job requirements as outlined within. Projects are awarded based upon meeting program criteria. V. ELIGIBLE ACTIVITIES Forgivable Loan may be used for the following activities: 1. Land acquisition (city-owned property given preference) 2. Purchase of furniture, fixtures,and equipment (FF&E) along with new construction* *if equipment installation is greater than$2,000,Davis Bacon Rates apply VI. BUSINESSES ELIGIBILITY Any project meeting the above criteria,and located or proposed to be located within the city limits of Elk River as defined by this program,may be eligible for an Economic Development Forgivable Loan as further defined herein: 1. Business must be a for-profit corporation,partnership, or sole proprietorship. 2. Business must be a small business as defined by the Small Business Administration (SBA). 3. Business must have a positive net worth. 4. Business must be an industrial,manufacturing or technology-based industry 5. Religious,political, casino, sports facilities and pornographic enterprises are not eligible to use the Economic Development Forgivable Loan Program. VII. FORGIVABLE LOAN TERMS & CONDITIONS Loan Amount There is a maximum of$200,000 per forgivable loan. Federal guidelines require a minimum of one job to be created for every$35,000 requested. To receive maximum loan amount of$200,000,applicant would need to create six new FTE positions of which 51%meet LMI requirements. Wage and benefits must be equal or greater than$12.19/hr. The Federal poverty level changes annually. Applicants will have a minimum of two years to hire these jobs,and the jobs created by the forgivable loan program must be retained for a minimum of one year. Job creation and retention periods will be established by the Economic Development Authority (EDA) and the EDA Finance Committee. Program guidelines may be changed on a case-by-case basis at the EDA's discretion. Loan Structure All Economic Development Forgivable Loans shall be structured as direct loans. Interest will be fixed at 3% or 2 points below the lowest prime rate published in the Wall Street Journal, whichever is greater. The applicant must provide at least 50% of project cost through other means. Equity down payment requirements may vary depending on project and primary lending institution. Forgivable loan funds may be used as equity upon approval of primary lending institution. The EDA may require additional agreements to be signed by the borrower (i.e. security agreement, personal guarantees,business subsidy agreement). Other EDA Incentives Forgivable Loan Policy and Application t 1 ■ E i E 0 O Y Page 2 420 1NATLJPE