5.0. 6.0. 7.0. 8.0. 9.0. EDSR 08-09-1999

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ELK RIVER ECONOMIC DEVELOPMENT AUTHORITY • MEMORANDUM TO: Economic Development Authority FROM: Marc Nevinski, Assistant Director of Economic Development DATE: August 9, 1999 SUBJECT: Revised Micro Loan Fund Policies Issu e AsY ou are aware, staff has been in the process of revising the Micro Loan Fund polices. In July, the EDA Finance Committee reviewed a draft of the revised policies and provided comments on various aspects of the revisions, which have been incorporated into the attached draft. The EDA is now asked to provide its comments and recommendations for the Micro Loan Fund policy revisions. Background Two issues prompted modifications to the fund's policies. First, the need to state clear guidelines for different loan fund uses (i.e. gap financing, incentives, & redevelopment) required that various provisions of the policies be restructured. Second, last minute passage of the Business Subsidy Law by the state legislature placed restrictions on fund dollars and implemented reporting requirements. The result of these revisions is a loan fund that has three distinct loan programs: • The Supplemental Financing Program is designed fill a gap that may exist between project costs and conventional financing sources. Up to $50,000 is available to all Elk River industrial businesses for three years at one point below prime. • The Redevelopment Financing Program is designed for use by businesses in the central business district. Although dollars may be used for interior improvements, 20% of Micro Loan Fund dollars must be used for facade restoration. • The Incentive Financing Program is designed to attract industrial businesses to the West Business Park.Industries locating in the park are eligible to receive up to $100,000 for up to five years at four points below • prime. 13065 Orono Parkway • P. O. Box 490 • Elk River,MN 55330-1743 • (612) 441-7420 • Fax (612) 441.-7425 Equal Opportunity Housing and Equal Opportunity Employment