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Business Investment Page 2 of 5 <br /> projects that offer job opportunities with livable wages, <br /> provide broad employee benefits and leverage one job for each <br /> • $10,000 in loan funds. <br /> •Local support must be proven,with preference given to <br /> communities that are establishing an integrated approach to <br /> economic development planning. <br /> Businesses generally considered ineligible include retail,consumer <br /> services,conventional agricultural production and land development <br /> enterprises. <br /> Loan Application/Origination Fee <br /> A 1%Loan Application/Origination Fee is applied to the initial loan <br /> principal amount of which one-half is treated as a non-refundable <br /> loan application fee.The application fee is due upon verification in <br /> writing by the Initiative Foundation that the loan application meets <br /> basic program qualifying criteria.The balance of the Origination Fee <br /> is due in cash at the loan closing.The application Fee may be waived <br /> if warranted in cases where the request is denied or circumstances <br /> that require the application be withdrawn.The Origination Fee <br /> becomes obligated at the point where the loan has been approved and <br /> a signed Commitment Letter is in place. <br /> Eligible uses of Loan Funds <br /> Eligible project costs include land and buildings,construction, <br /> remodeling,machinery and equipment,financing costs and working <br /> capital.Ineligible uses include refinancing of debt,business <br /> acquisition and non-owner occupied building construction. <br /> Interest Rate/Loan Repayment Terms <br /> Interest rates are determined on a case by case basis.Rates are fixed <br /> for the repayment term of the loan.Repayment terms are generally <br /> determined by the useful life of the collateral securing the loan, <br /> consistent with conventional lending practices.However,Initiative <br /> Foundation loan dollars must be repaid in full within ten years. <br /> Credit Review/Collateral <br /> Credit review criteria is consistent with most alternative lenders.All <br /> required information must be supplied,adequate cash flow and debt <br /> service must be clearly identified,and sales projections must be <br /> supported. Owner commitment to the project must be shown, <br /> generally in the form of owner equity in the project,and personal <br /> guarantees for majority owners are required. <br /> Proven management expertise and production experience must be <br /> identified.As a gap lender,the Initiative Foundation considers higher <br /> risk than conventional lenders in securing its loans.However, <br /> collateral is required and evaluation of collateral is consistent with <br /> conventional lending sources. <br /> Application Process/Technical Assistance <br /> Complete applications received by the 15th of each month will <br /> generally be reviewed by the Initiative Foundation Loan Committee <br /> by the 15th of the following month. Staff review of the application <br /> includes a thorough analysis of application materials and a site visit <br /> • with owners. Incomplete applications may cause delay in review. <br /> Local economic development professionals and Small Business <br /> http://www.ifound.org/html/businvt.htm 9/5/02 <br />