4.1. JFC 08-27-2019 - Laserfiche WebLink

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N:\Departments\Community Development\Economic Development\EDA\Administrative\Agenda\EDA Finance Committee Agenda Packets\2019\08272019\4.1 sr Distinctive Iron Job Incentive Microloan Request.docx 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. Creating 5 FT jobs in Elk River accounts for a loan amount up to $100,000 and retaining 14 FT jobs accounts for $140,000. By policy, the applicant is eligible for a $240,000 loan. The maximum loan available per the city’s policy is $200,000. Summary The applicant is eligible for a maximum loan of $200,000 per the city’s policy, meeting the equity, wage, and job criteria requirements and the proposed fund uses are eligible expenses. However, the applicant has an existing loan with the city with a balance of approximately $90,060. The applicant has requested the old loan to be refinanced with the new request of $100,000 for a total of approximately $190,060. This amount may be adjusted based upon principle and interest payments received. The project scored 36/50 points, representing a highly desirable project. Terms Staff is proposing to roll the existing loan balance of $90,060 into the new loan of a $100,000 for a total of $190,060. The loan will be amortized over 20 years at 3% with a 5-year balloon payment. The EDA will retain a 2nd position on the equipment and real estate, and in addition the loan will be secured with a personal guarantee. Financial Impact If the committee agrees this loan meets the goals of the city and EDA, the loan funds could be funded from the City Microloan Fund account, which has a balance of $950,516.68 Attachments  Microloan Application  Scoring Worksheet  Company Information  Commitment Letter from the Bank of Elk River  Commitment Letter from Applicant  City Microloan – Additional Information  Company Financials (confidential, available at the meeting)