6.9 EDSR 01-19-2016 - Laserfiche WebLink

Home Browse Search

City of Elk River, Minnesota Patriot Converting, Inc. December 22, 2015 Page 2 The application received by the City includes a requested loan amount of $200, 000 with 22 jobs being created within 2 years. The average hourly wages of 17 jobs are $15-$17 and 5 jobs have annual salary of $63,000 for a total of 22 jobs. The project as proposed with the job creation would meet the City's Business Subsidy Policy. The microloan funds would be used to meet the job creation requirements of the project. 3. Permitted Fund Uses of Microloan (Page 6 of Policy) To qualify for receipt of a microloan, the applicant must utilize the funds for the specific purposes outlined in the City's Economic Development Microloan policy. Funds may be used by the borrower for costs related to job creation and retention as a result of the project. According to the policy, loans may be used for the following activities: 1. Building construction 2. Land acquisition 3. Machinery 4. Furniture, fixtures, and equipment (FF&E) 5. Renovation and modernization of buildings 6. Exterior renovation of retail, commercial and industrial buildings 7. Public infrastructure needed for economic development expansions 8. Investment real estate with a minimum of 50% of the space pre -leased The funds would be used for equipment purchase and building purchase and remodeling. 4. Business Eligibility (Page 7 of Policy) In addition to having an eligible project a business must also meet certain criteria before it is deemed eligible to receive forgivable loan funds. According to the Economic Development Microloan Fund Policy, to be eligible for a microloan a business must meet the following • Business must be a for-profit corporation, partnership or sole proprietorship: • Business must be a small business as defined by the small business administration: • Business must have a positive net worth: • Business must be an industrial, manufacturing, or technology-based industry: • Religious, political, casino, sports facilities and pornographic enterprises are not eligible to use the Economic Development Forgivable Loan Program: Based on the submitted application, the business is a for-profit corporation defined as a small business, is an industrial, manufacturing or technology-based industry and is not a religious, political, casino, sports facilities, or pomographic enterprise. The two most recent full years of financial statements (2013 and 2014) indicates negative total equity, however this can be attributed to the current company position of two locations and the additional costs of double handling and shipping. Following the completion of the consolidation into one location in Elk River, the company is showing projected positive total equity and income for the company starting in 2016.