7 PCSR 04-26-1994 - Laserfiche WebLink

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• 2. Central Minnesota Initiative Fund The Initiative Fund is a private, non profit corporation dedicated to strengthening the economy and enhancing the quality of life in the fourteen-county Central Minnesota area. The initiative program provides supplemental loan assistance to small businesses and also provides grants to non-profit organizations. Business loans range from $5,000 to $100,000 with the majority of the project funds coming from private investments (primary lender and company equity). 3. SBA 504 Loan This is a fixed-asset mortgage program to help small businesses achieve long-term, low-interest financing for expansion and/or relocation projects. The acquisition of land and the purchase and/or construction of buildings are typically financed under the 504 Program. The option to finance machinery and equipment under this program is available, too. 4. Tax Increment Financing This is a locally administered grant program that relies on future property tax payments to fund specific development activities such as site acquisition, site preparation cost, demolition of blighted structures, and the clean-up of polluted property. Because new restrictions continue to be placed on the use of TIF, its availability in Elk River is subject to an on-going evaluation. 5. Industrial Revenue Bonds State and Federal law enables cities to issue long-term below-market bonds or mortgages to assist commercial and industrial expansions. Because the IRB is sold by the municipality, the bond issue is considered tax-exempt and this low interest is passed on to the expanding company in the form of a mortgage that is well below current market rates. The company's credit worthiness is instrumental in determining the interest rate. Real estate can be financed over 20 years, equipment at 10 years - not to exceed the useful life of the asset being financed. Soft costs such as architectural fees and legal fees may also be included in the bond issue. •