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City of Elk River, Minnesota <br />Stonesthrow Companies, LLC and Coin-Tainer Co., LLC Microloan Fund Application Review <br />December 15, 2014 <br />Page 5 <br />Whenever possible, personal guarantees will be made part of any loan agreement: The applicant agrees to <br />provide a personal guarantee, if requested. <br />Key person life insurance may be required as determined by the EDA Finance Committee based on loan <br />amount and company ownership partners: The applicant does not plan to add additional life insurance, bu <br />has $3.5 million dollar policy and would add the EDA as a beneficiary ahead of his wife, if requested. <br />8. Timing of Project Expenses (Page 8 of Policy) <br />To be regulated if funding is approved and determined to be used <br />9. Procedural Guidelines for Application and Approval (Page 8 of Policy) <br />To be regulated if funding is approved and determined to be used <br />The EDA Finance Committee is asked to evaluate the project application based on the <br />following criteria <br />a.Project design: evaluation of project design will include review of proposed activities, time lines and a <br />capacity to implement <br />b.Financial feasibility: availability of funds, private involvement, financial packaging and cost effectiveness <br />Appropriate ratio of private funds to microloan funds:Stonesthrow Companies, LLC is intending to <br />acquire the existing building that Coin-Tainer Co., LLC is curre <br />facility to Coin-Tainer Co., LLC and the other existing tenants. Acquisition of the building is estimated to <br />be $2.6M and Stonesthrow Companies, LLC is planning to finance t <br />deed with the microloan funds of $200,000 used to assist with th <br />private funds to finance of $2.4M and microloan funds of $200,00 <br />that meets the minimum criterion (50%) of the City’s policy. <br />Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and <br />projections: Stonesthrow Companies, LLC has requested assistance from the City of Elk River to <br />assist with acquisition of the facility and reduce the amount of <br />the contract for deed. The contract for deed is amortized at a h <br />therefore the microloan provides a lower interest alternative for a portion of the acquisition costs. <br />Reducing the annual debt payments through the lower-interest loa <br />cover debt service over the first 5 years. The applicant anticipates refinancing and/or selling the building <br />at the time the obligations are due to provide sufficient capita <br />Ability to demonstrate positive net worth:As stated previously, the applicant has positive net worth <br />as of October 2014 and has indicated relocation of business oper <br />certain operations following the fire in Milaca will result in l <br />