4.1. EDSR 06-28-2016 - Laserfiche WebLink

Home Browse Search

The EDA may require additional agreements to be signed by the borrower(i.e.security agreement, personal guarantees,business subsidy agreement). Other EDA Incentives Projects can combine the forgivable loan with all other incentives(i.e.:Micro Loan Program,Tax Abatement,TIF,etc. Call of Loan Forgivable Loan terms are set by the EDA.Projects which don't meet the terms may be required to repay all or a portion of the loan as determined in the loan agreement. If the 51%of LMI job creation is not met,the funds will need to be repaid. A job creation extension may be granted upon review of the Economic Development Authority on a case by case basis. Repayment terms will vary depending on the use of funds and collateral securing the loan. Specific repayment terms will be defined in the loan agreement in the event repayment of part or the entire forgivable loan is required. A loan shall become due and payable in full if a business relocates outside of the City of Elk River prior to the maturity date of the loan. The loan will be forgiven upon completion of all of the goals set forth by the EDA,and the jobs created as a result of the forgivable loan program are retained for a minimum of one year. VIII. LOAN SECURITY AND GUARANTEES Applicant must secure the loan by providing the EDA with a minimum of a subordinate mortgage upon the building and/or assets or other approved collateral. Personal guarantees will be made part of all loan agreements. Key person life insurance may be required as determined by the EDA Finance Committee based on loan amount and company ownership partners. IX. TIMING OF PROJECT EXPENSES/PROJECT TIMELINE No project can commence until the Elk River Economic Development Authority has approved the loan application. Any costs incurred prior to the approval of the loan application are not eligible expenditures. Applicant must submit project timeline with application;timeline will assist in determining job creation goal deadlines. The applicant will be responsible for all legal,recording,and other fees required for protection of a security interest in the loan,payable by a non-refundable 1%processing fee,which is paid at the time of application. In addition to the non-refundable 1%processing fee,all legal and filing fees shall be paid by the borrower at loan closing. X. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. All applicants shall first contact a primary lending institution to determine if additional equity is needed,and if so,how much. 2. The applicant and the primary lender(if applicable)shall then meet with City Staff to obtain information about the Economic Development Forgivable Loan program,discuss the project,and obtain application forms. 3. The applicant shall complete and submit an application form to the City,along with a processing fee Forgivable Loan Policy and Application P 0 N [ R 1 0 R INAWREE] Page 3of20