5.0.-14.0. EDSR 09-13-1993 - Laserfiche WebLink

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• USE OF PERSONAL/ BUSINESS RESOURCES: Kevin Kloeppner is requesting a loan to assist Water Laboratories, Inc. in the purchase of a $107,400 office condominium in Elk River, MN. The proposed structure would include: SBA Loan $ 75,000 69.8% Kloeppner's injection 17,400 16.2% Community Development Loan 15.000 14.0% TOTAL $107,400 While Kloeppner and the corporation do have additional resources available for this project, Kevin would like to conserve his working capital resources to support growth. Kevin's additional resources would be utilized in the event of cost overruns. USE OF LOAN PROCEEDS: The loan proceeds would be utilized to purchase an office condominium in Elk River to house Water Laboratories, Inc. and ECO-Systems Engineering, Inc. The building is to be constructed by Dennis Chuba in Fall 1993, for occupancy in November or December 1993. Water Laboratories' unit would be 1400 sq. ft., as drawn in the attached Exhibit A. The builder • utilizes a cost estimate of$75 per square foot. The construction will be wood frame with brick finishes. The contractor will be financing all construction expenses, and our loan will be needed as a takeout only. The loan terms requested from the Elk River Economic Development Authority are $15,000, floating at Prime + 0% with semi-annual adjustments throughout the 15 year term. With an estimated initial rate of 6%, the payment would be $127 per month. The suggested collateral is a second REM on the commercial real estate. The borrower and lender will appear before the Elk River Economic Development Finance Committee in the second week of September. The SBA loan approval is contingent on the approval of the Economic Development financing substantially in the amount and terms relied on in this presentation. BALANCE SHEET ANALYSIS: As of May 31, 1993, Water Laboratories, Inc. had $31M in total assets. As a service provider, the company does not have inventory. With $10M in cash and $7M in A/R from ECO-Systems Engineering, Water Laboratories has a current ratio of 2.43:1. Working capital stands at$10M. Fixed assets consist primarily of lab equipment, with a current net book value of $11M. The fixed assets are on a rapid depreciation schedule because $8M of their $19M cost has been depreciated since purchase in October 1991. The corporation lists $15M in other • assets/intangibles for organizational and start up costs. All but $3M of these intangible assets have been amortized since 10/91.