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• 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 EDA may require additional agreements to be signed by <br /> the borrower (i.e. security agreement,personal guarantees,job performance <br /> agreement). <br /> 2. Simultaneous Micro Loans <br /> The simultaneous use of different Micro Loan Fund Programs by any one borrower <br /> or for any one project is prohibited. <br /> 3. Call of Loan <br /> • A loan shall become due and payable in full if a business relocates outside of the city <br /> of Elk River prior to the maturity date of the EDA loan. <br /> 4. Late Payment Charge <br /> A late payment charge of up to 8% of the installment amount may be enforced. <br /> VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS <br /> All buildings which public funds will be used for construction or renovation are to <br /> be brought into conformance with city codes and policies. Repairs may include the <br /> following systems and portions of real property: <br /> a. Mechanical heating,plumbing, and electrical <br /> b. Structural;including the facade of the structure and energy related <br /> improvements. <br /> c. Hook-up to city services (i.e.water, sewer) <br /> VII. LOAN SECURITY AND GUARANTEES <br /> Applicant must be able to secure the loan by providing the EDA with a minimum of <br /> a subordinate mortgage upon the building and/or assets or other approved collateral. <br /> Applicant must demonstrate the financial means to repay the loans, as determined by <br /> the Economic Development Authority. <br /> • Whenever possible,personal guarantees will be made part of any loan agreement. <br /> Elk River Economic Development Authority <br /> Micro Loan Fund Policy&Guidelines Page 5 of 8 <br />