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<br />d)Retain jobs for a minimum of one year <br /> <br />e)Interest – 3% or two points below prime <br /> <br />f)Financial Feasibility <br /> <br />i)Appropriate ratio of private funds to Forgivable Loan funds <br /> <br />ii)Sufficient cash flow to cover proposed debt service <br /> <br />iii)Ability to demonstrate a positive net worth. <br /> <br />iv)Letter of Commitment from applicant pledging to complete the project during <br />proposed project duration. <br /> <br />v)Letter of Commitment from other financing sources stating terms and conditions of <br />their participation in the project if applicable <br /> <br />vi)Sufficient collateral <br /> <br />vii)Certificate of Good Standing from the Minnesota Secretary of State or other <br />satisfactory evidence of good standing. <br /> <br />viii)Project compliance with all city codes and policies <br /> <br />Apex’s application scored 278 out of a possible 465 points on the Forgivable Loan scoring sheet. <br /> <br />Apex Embroidery & Design Application Breakdown <br /> <br />1.Amount Requested: $200,000 <br /> <br />2.Interest Rate: 3% <br /> <br />3.Job Creation: 7 jobs at no less than $15/hr. At least 51% will be awarded to LMI applicants. <br /> <br />4.Job Retention – retain the jobs for a minimum of one year. <br /> <br />5.Financial Feasibility <br /> <br />a.Private Funding – $1,550,968 of private investment to $200,000 in public funds, a 7:1 ratio. <br /> <br />b.Cash Flow – According to the profit and loss statement provided, they have had a positive <br />cash flow for each of the past three years. <br /> <br />c.Letter of Commitment – Brian Hill, President of Apex Embroidery & Design, submitted a <br />letter dated August 24, 2016, committing to complete the expansion by the Spring of 2017. <br /> <br />d.Letter of commitment from other financing – Neil Gagnon of The Bank of Elk River <br />submitted a letter on September 6, 2016, stating Apex demonstrates the ability to service <br />debt payments on the proposed project. The debt structure proposed to The Bank of Elk <br />River will allow for a loan on the land, building and equipment of up to $1,450,000. The <br />final loan will be calculated based off the lesser of 80% of the appraised value or cost and <br />be amortized over a period of 20 years, 5-year balloon at 4.25 percent. The Bank will also <br />be primary lender for an equipment loan of $351,000 over a period of 6 years at 4.55%. <br /> <br />e.Collateral – the city will seek a subordinate position on the real estate and secure a <br />personal guarantee. <br /> <br />f.Certificate of Good Standing – Received by the city. <br /> <br />Financial Impact <br /> <br />The Forgivable Loan Fund balance is $200,000 which would be fully depleted. The borrower will pay all <br />legal and filing fees at closing. The Forgivable Loan will be secured by a second lien position on the real <br />estate, in addition the applicant will provide a both a personal guarantee and an entity guarantee. <br /> <br />Attachments <br /> <br /> <br /> <br />Forgivable Loan Application & Review Worksheet <br /> <br /> <br />EDA Finance Committee Staff Report (September 29, 2016) <br /> <br />N:\\Public Bodies\\Agenda Packets\\10-17-2016\\7.1 - missing 2 attachments\\7.1 at2 EDA Staff Report Apex Forgivable Loan Application <br />Request.docx <br />