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c. Machinery <br /> d. Furniture, fixtures, and equipment (FF&E) <br /> • e. Renovation and modernization of buildings <br /> f. Exterior renovation of retail, commercial and industrial buildings <br /> g. Public infrastructure needed for economic development expansions <br /> h. Investment real estate with a minimum of 50% of the space pre-leased <br /> 2. Ineligible Fund Uses: <br /> a. Expenditures for the construction and/or renovation of residential units <br /> b. Working capital <br /> c. Refinancing of existing debt <br /> d. Inventory <br /> IV. BUSINESSES ELIGIBILITY <br /> Any project meeting the above criteria, and located or proposed to be located within <br /> the city limits of Elk River as defined by this program, may be eligible for an <br /> Economic Development Micro Loan as further defined herein: <br /> • Business must be a for-profit corporation, partnership, or sole <br /> proprietorship. <br /> • Business must be a small business as defined by the Small Business <br /> Administration (SBA). <br /> • Business must have a positive net worth. <br /> • Religious, political, and pornographic enterprises are not eligible to use <br /> • the Economic Development Micro Loan Fund. <br /> V. MICRO LOAN FUND TERMS & CONDITIONS <br /> 1. Loan Structure <br /> All EDA Micro Loans will be structured as participation loans and will be serviced by <br /> the project's primary lending institution. Such an arrangement allows for the central <br /> distribution and collection of funds and simplifies the financing process for all <br /> parties involved. A participation agreement will be signed by the borrower, primary <br /> lender and the EDA. The agreement will include the following provisions, among <br /> others: <br /> • If Borrower does not meet the job and wage goals specified in the Subsidy <br /> Agreement, the interest rate will change to 2 points above the participating <br /> bank's rate, effective from the two year anniversary of the loan closing. <br /> Upon subsequent achievement of the jobs and wage goals, the interest rate <br /> will revert back to the rate when the loan was originated, effective from the <br /> date of attainment of the job and wage goals. <br /> • If Borrower defaults on the loan, the EDA will collect all further payments <br /> during the default based on a pro-rata basis with the participating bank <br /> excluding the distribution of proceeds resulting from the foreclosure on <br /> collateral. <br /> Elk River Economic Development Authority <br /> Micro Loan Fund Policy&Guidelines <br /> Revised June 2004 Page 4 of 8 <br />