6.2 EDSR 02-17-2015 - Laserfiche WebLink

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City of Elk River, Minnesota Distinctive Iron, LLC January 23, 2015 Page 3 7. Loan Security and Guarantee Requirements (Page 8 of Policy) The City’s Economic Development Microloan Fund policy states that prior to the City granting a loan to a proposed business, that the proposed project must meet certain loan security requirements. These requirements are: Applicant must be able to secure the loan by providing the EDA with a minimum of a subordinate mortgage upon the building and/or assets or other approved collateral: Applicant must demonstrate the financial means to repay the loans, as determined by the Economic Development Authority: Whenever possible, personal guarantees will be made part of any loan agreement: Key person life insurance may be required as determined by the EDA Finance Committee based on loan amount and company ownership partners: 8. Timing of Project Expenses (Page 8 of Policy) To be regulated if funding is approved and determined to be used 9. Procedural Guidelines for Application and Approval (Page 8 of Policy) To be regulated if funding is approved and determined to be used The EDA Finance Committee is asked to evaluate the project application based on the following criteria a.Project design: evaluation of project design will include review of proposed activities, time lines and a capacity to implement b.Financial feasibility: availability of funds, private involvement, financial packaging and cost effectiveness $504,000/$126,000 Appropriate ratio of private funds to microloan funds: Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and projections:information regarding operating performance and ability to support debt service will be provided to the EDA Finance Committee meeting while review under Ability to demonstrate positive net worth: information regarding ability to maintain positive net worth will be provided to the EDA Finance Committee meeting with revie Letter of commitment from applicant pledging to complete the project during proposed project duration:Provided Letter of commitment from other financing sources stating terms and conditions of their participation. Provided Sufficient collateral: c.All other information as required in the application and/or additional information as may be requested by the Economic Development Authority