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Consider Micro Loan Application: Badger Ventures, LLC (Gradient Technology) <br />EDA -June 14, 2004 <br />Page 2 of 2 <br /> o Term: Add "Balloon payment must not be longer than balloon payment of <br /> the participating bank" <br /> o Criteria: Eliminate "Borrower must locate in the West Business Park" <br /> <br />Badger Ventures Application <br />On June 9, 2004 the Finance Committee unanimously recommended that the EDA consider <br />awarding Badger Ventures, LLC a $100,000 Industrial Incentive Program Micro Loan <br />contingent upon and subject to proposed amendments to the Micro Loan Policy. <br /> <br />The proposed use of the loan is to finance construction costs of a new 13,000 square foot <br />light industrial/business park building in Elk River. The loan is proposed to be structured as <br />a participation loan with The Bank of Elk River. <br /> <br />A representative from Gradient Technology will be available at the EDA meeting to discuss <br />the proposed project and answer questions. <br /> <br />Recommendations <br /> <br />Staff recommends that the EDA consider the suggested amendments to the Micro Loan <br />Fund Policy regarding the following: <br /> <br />· Criteria for the Industrial Incentive Program <br />· Eliminate the Supplemental Micro Loan Program <br />· All Micro Loans be consummated via a bank participation loan <br /> <br />Regarding the suggested additions to the bank participation loan agreement and the Business <br />Subsidy Agreement, staff recommends that the EDA consider maintaining the current <br />agreements. It is important that industrial financing incentives remain flexible while <br />meeting, not exceeding, the MN Business Subsidy Law. <br /> <br />Staff also recommends that the EDA consider approval of the application from Badger <br />Ventures, LLC (Gradient Technology) for a $100,000 Industrial Incentive Program Micro <br />Loan upon consideration of the proposed Micro Loan Policy amendments. The terms of <br />the loan are as follows: <br /> <br />Rate <br /> <br />TerlTl <br />Security <br /> <br />Structure <br /> <br />Job performance agreement <br />(subsidy agreement) <br /> <br />f~xed, 2 points below prime with a 3% floor <br />15-year amortization, up to 5-year balloon payment <br />Secured by 2nd position on the real estate, personal <br />guarantee from owners and spouses <br />participation loan with The Bank of Elk River <br /> <br />to include 5 new full-time jobs in Elk River with <br />estimated wages ranging from $15-$75.00 within 2- <br />rears <br /> <br /> <br />