7.0. EDSR 03-10-2003 - Laserfiche WebLink

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\ / Item # 2 • City of Elk River MEMORANDUM TO: EDA Finance Committee Members CC: Lori Johnson, Finance Director FROM: Catherine Mehelich, Director of Economic Development DATE: February 28, 2003 SUBJECT: Micro Loan Application: Lake Assault Custom Boats Issue Staff has received a request by Jerry Atherton, President of Lake Assault Custom Boats for a Supplemental Micro Loan in the amount of$50,000 to be used for equipment purchase. The loan is proposed to be structured as a participation loan with M &I Bank of Coon • Rapids. Background Lake Assault Custom Boats is a start-up manufacturer of custom fishing boats. The company has identified a very targeted market of elite fishermen. The company has identified 7,500 square feet of lease space in the Decker building for its manufacturing operation. The company owner,Jerry Atherton, has extensive experience in the sheet-metal industry. The applicant proposes to use the micro loan funds to purchase equipment necessary to initiate production and sales of the boats. The company has financing commitments for equity investment and a bank line of credit. In addition, the company has submitted an application for financing from the Initiative Foundation. The sources and uses of the project are as follows: Bank Line of Credit $100,000 Working Capital Private Equity $ 80,000 Working Capital Initiative Foundation $ 75,000 Working Capital EDA Loan $ 50,000 Equipment Total Project $305,000 The applicant has proposed that the EDA take a first position on the equipment. The preliminary equipment list is attached. • The applicant proposes to create 7 to 12 full-time jobs within the first two-years of the project. Proposed wages are not less than $17.00 per hour.