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City of Elk River, Minnesota <br />Distinctive Iron, LLC <br />January 23, 2015 <br />Page 2 <br />3. Permitted Fund Uses of Microloan (Page 6 of Policy) <br />To qualify for receipt of a microloan, the applicant must utilize the funds for the specific purposes outlined in the City’s <br />Economic Development Microloan policy. Funds may be used by the borrower for costs related to job creation and <br />retention as a result of the project. According to the policy, loans may be used for the following activities: <br />1.Building construction <br />2.Land acquisition <br />3.Machinery <br />4.Furniture, fixtures, and equipment (FF&E) <br />5.Renovation and modernization of buildings <br />6.Exterior renovation of retail, commercial and industrial buildings <br />7.Public infrastructure needed for economic development expansions <br />8. Investment real estate with a minimum of 50% of the space pre-leased <br />4. Business Eligibility (Page 7 of Policy) <br />In addition to having an eligible project a business must also meet certain criteria before it is deemed eligible to <br />receive forgivable loan funds. According to theEconomic Development Microloan Fund Policy, to be eligible for a <br />microloan a business must meet the following <br />Business must be a for-profit corporation, partnership or sole proprietorship: <br />Business must be a small business as defined by the small business administration: <br />Business must have a positive net worth: <br />Business must be an industrial, manufacturing, or technology-based industry: <br />Religious, political, casino, sports facilities and pornographic enterprises are not eligible to use the <br />Economic Development Forgivable Loan Program: <br />Based on the submitted application, the business is a for-profit <br />industrial, manufacturing or technology-based industry and is no <br />pornographic enterprise. The two most recent full years of fina <br />net worth. Through the 3 rd quarter 2014 the submitted information shows positive net worth <br />5. Microloan Fund Terms & Conditions (Page 7 of Policy) <br />To be determined if loan terms approved by the EDA. <br />6. Regulation for New Construction and Improvements (Page 7 of <br />To be regulated if funding is approved and determined to be used <br />