6.2 EDSR 10-17-2016 - Laserfiche WebLink

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d)Retain jobs for a minimum of one year e)Interest 3% or two points below prime f)Financial Feasibility i)Appropriate ratio of private funds to Forgivable Loan funds ii)Sufficient cash flow to cover proposed debt service iii)Ability to demonstrate a positive net worth. iv)Letter of Commitment from applicant pledging to complete the pro proposed project duration. v)Letter of Commitment from other financing sources stating terms their participation in the project if applicable vi)Sufficient collateral vii)Certificate of Good Standing from the Minnesota Secretary of Sta satisfactory evidence of good standing. viii)Project compliance with all city codes and policies Apexs application scored 278 out of a possible 465 points on the Forgivable Loan scoring sheet. Apex Embroidery & Design Application Breakdown 1.Amount Requested: $200,000 2.Interest Rate: 3% 3.Job Creation: 7jobs at no less than $15/hr. At least 51% will be awarded to LMI applicants. 4.Job Retention retain the jobs for a minimum of one year. 5.Financial Feasibility a.Private Funding $1,550,968 of private investment to $200,000 in public funds, a 7:1 ratio. b.Cash Flow According to the profit and loss statement provided, they have h cash flow for each of the past three years. c.Letter of Commitment Brian Hill, President of Apex Embroidery & Design, submitted a letter dated August 24, 2016, committing to complete the expansion by the Spring of 2017. d.Letter of commitment from other financing Neil Gagnon of The Bank of Elk River submitted a letter on September 6, 2016,stating Apex demonstrates the ability to service debt payments on the proposed project. The debt structure proposed to The Bank of Elk River will allow for a loan on the land, building and equipment 0. The final loan will be calculated based off the lesser of 80% of the be amortized over a period of 20 years, 5-year balloon at 4.25 percent. The Bank will also be primary lender for an equipment loan of $351,000 over a perio of 6 years at 4.55%. e.Collateral the city will seek a subordinate position on the real estate and secure a personal guarantee. f.Certificate of Good Standing Received by the city. Financial Impact The Forgivable Loan Fund balance is $200,000 which would be fully depleted. The borrower will pay all legal and filing fees at closing. The Forgivable Loan will be secured by a second lien position on estate, in addition the applicant will provide a both a personal guarantee and an entityguarantee. Attachments Forgivable Loan Application & Review Worksheet EDA Finance Committee Staff Report (September 29, 2016) N:\Departments\Community Development\Economic Development\EDA\Administrative\Agenda\EDA Agenda Packets\2016\10-17-2016\6.2 sr EDA Apex Forgivable Loan Application Request.docx