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Business Investment Page 2 of 5 <br /> •Owners are expected to reside in the area.Under certain <br /> circumstances,the owner residency requirement may be <br /> waived. <br /> •Job creation/job retention is required.Preference is given to • <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.Businesses generally <br /> considered ineligible include retail,consumer services, <br /> conventional agricultural production and land development <br /> enterprises. <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,but generally are <br /> below market rate.Rates are fixed for the repayment term of the loan. <br /> Repayment terms are generally determined by the useful life of the <br /> collateral securing the loan,consistent with conventional lending <br /> practices.However,Initiative Foundation loan dollars must be repaid <br /> in full within ten years. <br /> Credit Review/Collateral <br /> Credit review criteria is consistent with most alternative lenders.All411 <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 /> Development Centers are available throughout the Central Minnesota <br /> region to assist new and expanding businesses.For a list of locally <br /> supported technical assistance providers in the region,please contact <br /> the Initiative Foundation office. <br /> This program of the Initiative Foundation is supported in part by • <br /> Minnesota Department of Trade and Economic Development,the <br /> USDA Office of Rural Development,The McKnight Foundation, <br /> http://www.ifound.org/html/businvt.htm 8/10/01 <br />