5.0. 6.0. 7.0. EDSR 08-10-1998 - Laserfiche WebLink

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Business Development Funnel Guidelines, p. 3, 7/30/98 • Business Development Fund Description for Investors The Business Development Fund(BDF)allows individuals,businesses and governmental units to invest in economic development in Sherburne County. This investment is available through the purchase of Business Development Fund Certificates of Deposit(BDCD). These deposits are available in increments of$1,000. The CD's are fully insured by the F.D.I.C. They pay an interest rate of 3.25%below New York prime rate(as published in the Wall Street Journal).An additional .25%will be paid as a finders fcc to the Sherburne County Economic Development Alliance. The investment rate will be adjusted quarterly and compounded quarterly. Investment in the certificates will be for five(5)years. For example,if the prime rate is 8.5%,then the DDCD will initially pay 5.25%,with the rate adjusting quarterly thereafter. For example,a$1,000 investment in a BDCD at 5.25%will yield$52.50 in simple interest annually(ignoring compounding for this example). A variable rate C.U.at an average rate of 6%would yield$60. The small difference of$7.50 is not great,yet it gives you the satisfaction of having made a contribution to economic development in Sherbume County. Loans are made through the BDF to existing or new manufacturing businesses who want to expand or locate in Sherburne County. Funding from the program must be used for equipment,real estate,or new construction. The loan must either create new jobs or improve or retain existing jobs. Funds generated by BDCDs arc used to offer reduced rate financing through participating banks. BDF are loaned out by the banks at 1%below prime rate. The participating bank retains the difference between the BDCD rate and the loan rate as its"spread"or fee for administering the loan(initially it will always be 2%). All funds borrowed through this program must • meet the lending requirements of the participating bank. The maximum term of an BDF loan is 5 years,yet individual banks may consider longer amortizations(without BDF subsidy after 5 years)as they deem • appropriate. The minimum loan amount is$100,000 and the maximum is$500,000. The collective investment of Sherburne County businesses,banks,individuals,and governmental units in the Business Development Fund provides an excellent revenue source for financing the expansion of existing and the attraction of new manufacturing or distribution businesses to Sherburne County. For more information,contact a Sherburne County Bank,or Michael Darger at Sherburne County,241- 2744 or 1.800-433-5229 Banker Participation Banks with a branch located in the County will be eligible to participate in making loans. Also,banks with branches in cities not wholly included in or with a common border to Sherburne County wilt be eligible to participate(i.e. St. Cloud,Monticello,Princeton,Ramsey,Otsego,Clearwater,Sauk Rapids, etc.). However,all banks which choose to participate as lenders must first make a minimum investment of$25,000 in BDCDs. In the case of loans exceeding$100,000,there will be BDCDs placed with the originating bank by more than one investor. This is ensure that FDIC insurance of only$100,000 per depositor is not exceeded. Any government investor exceeding$100,000 in one bank will receive the additional pledge of assets required by law.