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• ELK RIVER ECONOMIC DEVELOPMENT <br /> MICRO LOAN FUND POLICY & GUIDELINES <br /> Revised June 2004 <br /> PURPOSE <br /> The Economic Development Authority for the City of Elk River (EDA) recognizes <br /> the need to stimulate private sector investment into manufacturing facilities and <br /> equipment in order to create new jobs,boost productivity and retain existing jobs for <br /> local residents.Additionally, the need exists to encourage investment in the <br /> expansion and/or rehabilitation of commercial and retail buildings in order to <br /> maintain the economic viability of Elk River's central business district. <br /> Subsequently, the purpose of this program is to provide low interest,long-term (i.e. <br /> greater than one year) loans as incentives for industrial development within the City <br /> of Elk River and to encourage commercial and retail business owners in the central <br /> business district to rehabilitate their existing buildings. <br /> II. LOAN PROGRAMS <br /> In order to meet the economic and community development objectives of the EDA, <br /> two distinct loan programs exist within the Micro Loan Fund to promote business <br /> growth in Elk River. <br /> • Industrial Incentive Program <br /> Purpose: The purpose of the Industrial Incentive Program is to encourage <br /> industrial development that supports the tax base and brings quality <br /> jobs to the city. <br /> Amount: Up to $100,000 of secondary financing not to exceed 20% of the <br /> project cost. <br /> Equity: Must have private-sector commitments for 50% of the project cost. <br /> Borrower to provide 10% or more of project financing. <br /> Rate: Fixed;2 points below the lowest prime rate published in <br /> the Wall Street Journal the day the loan is closed, or 3%,whichever is <br /> greater. <br /> Term: Financing with a balloon payment in up to 5-years. The balloon <br /> payment must not be longer than the balloon payment of the <br /> participating bank. Loans may be amortized up to the following <br /> limits: <br /> 15-years on real estate uses; <br /> 10-years on equipment uses. <br /> Elk River Economic Development Authority <br /> Micro Loan Fund Policy&Guidelines <br /> Revised June 2004 Page 2 of 8 <br />