5.1. EDSR 07-16-2018 - Laserfiche WebLink

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The Finance Committee should consider the type of request and whether the applicant meets the fundamental goals of the policy. Equity: Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project financing. The Initiative Foundation has committed to 50% of the project financing. The borrower will contribute $100,000 or 20% of the project financing. Criteria: Borrower must create one new full-time job for each $20,000 loaned, retain one new full-time job for each $10,000 loaned, or combination of retainage and creation to meet the requirements. All new jobs must be created within two years and retained for the period of the loan. Said jobs must pay greater of $15.00 per hour or 150% of state or federal minimum wage exclusive of benefits required by law. Any loans shall meet the city of Elk River Business Subsidy Policy for the creation of new jobs, as well as a 5- year location requirement. By retaining 54 jobs and creating 10 new jobs with an average wage of $24.65/hr. the applicant is eligible to receive the maximum loan amount of $200,000. Summary The applicant is eligible for a loan of $200,000 meeting the equity, wage, and job criteria requirements and the proposed fund uses are eligible expenses. Financial Impact The balance of the Jobs Incentive Microloan Fund account is $224,100. The Initiative Foundation has agreed to partner with the city to leverage funds for the project through an SBA guarantee loan of $200,000. A direct loan from the EDA of $200,000 could cover the remaining $400,000 request. Orluck is proposing to give the EDA collateral positions in two pieces of equipment and pay the remaining balance of their loan with US Bank Equipment Financing for the Ziess Contura G2. This is a piece of inspection equipment with a fair market value of $100,000. EDA can place a UCC Filing for this equipment taking the first collateral position. Orluck has asked Canadian lender Ibex to release their 2nd priority status on the Okuma Genos M560V financed by the Bank of America. This piece of equipment has a fair market value of $145,000 and EDA would have a second position on this collateral. Attachments  Microloan Application & Supporting Materials  Corporate and Personal Financial Information (distributed at the meeting)  Equipment Appraisal (distributed at the meeting)