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Oty <br /> Elk REQUEST FOR ACTION <br /> River <br /> To ITEM NUMBER <br /> Economic Development Authority Finance Committee <br /> AGENDA SECTION MEETING DATE PREPARED BY <br /> March 29,2013 Clay Wilfahrt,Assistant Director of <br /> Economic Development <br /> ITEM DESCRIPTION REVIEWED By <br /> Consider Forgivable Loan Application from Preferred Powder Jeremy Barnhart, Deputy Director <br /> Company Community Operations and <br /> Development <br /> REVIEWED BY <br /> ACTION REQUESTED <br /> Consider forgivable loan application from Preferred Powder Company <br /> BACKGROUND/DISCUSSION <br /> In February 2013, the EDA approved the Forgivable Loan program and set an initial application period <br /> of February 15 through March 15. The balance of the account is $703,679. The Department of <br /> Employment and Economic Development indicated that until this fund is expended, Elk River might be <br /> precluded from receiving additional state funding. <br /> Preferred Powder Company submitted an application during the initial application period. The details of <br /> the application are broken down below. <br /> The applicant must meet the following criteria for the Forgivable Loan Program: <br /> Forgivable Loan Criteria <br /> a) 50% of project financing from another source <br /> b) Maximum loan amount$200,000 <br /> c) Minimum of one job paying equal or greater to$12.19/hr. created per$35,000 requested, 51% <br /> of which must be awarded to low and moderate income (LMI) employees <br /> d) Retain jobs for a minimum of one year <br /> e) Interest—3% or two points below prime <br /> f) Financial Feasibility <br /> i) Appropriate ratio of private funds to Forgivable Loan funds <br /> ii) Sufficient cash flow to cover proposed debt service <br /> iii) Ability to demonstrate a positive net worth. <br /> iv) Letter of Commitment from applicant pledging to complete the project during proposed <br /> project duration. <br /> v) Letter of Commitment from other financing sources stating terms and conditions of their <br /> participation in the project if applicable <br /> vi) Sufficient collateral <br /> IBMEMEM Il <br /> NATURE <br />