6.1 EDSR 07-21-2014 - Laserfiche WebLink

Home Browse Search

ELK RIVER ECONOMIC DEVELOPMENT MICROLOAN FUND POLICY & GUIDELINES PURPOSE The Economic Development Authority for the city of Elk River(EDA)recognizes the need to stimulate private sector investment into manufacturing and certain commercial facilities and equipment in order to create new jobs,boost productivity and retain existing jobs for local residents.Additionally,the need exists to encourage investment in the expansion and/or rehabilitation of commercial and retail buildings in order to maintain the economic viability of the City and in the Elk River's Downtown District. Subsequently,the purpose of this program is to provide low interest,long-term(i.e.greater than one year)loans as incentives for new industrial and commercial development within the city of Elk River and to encourage commercial and retail business owners in the Downtown District to rehabilitate their existing buildings. 2. LOAN PROGRAMS In order to meet the economic and community development objectives of the EDA, three four distinct loan programs exist within the Microloan Fund to promote business growth in Elk River. Industrial Incentive Program Purpose: The purpose of the Industrial Incentive Program is to encourage industrial and high technology business development that supports the tax base and brings quality jobs to the city. Amount: Up to$100,000 of secondary financing not to exceed 20%of the project cost. Equity: Must have private-sector commitments for 50%of the project cost. Borrower must provide 10%or more of project financing. Rate: Fixed;2 points below the lowest prime rate published in the Wall Street Journal the day the loan is closed,or 3%,whichever is greater. Term: Financing with a balloon payment in 5-years. The balloon payment must not be longer than the balloon payment of the participating bank. Loans may be amortized up to the following limits: 20-years on real estate uses; 10-years on equipment uses. Page 11ot18 o r E R E I 11 NATURE Page 2 of 18