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Extension:In the event the borrower is unable to obtain conventional financing to replace the microloan at <br />the end of five years, the loan may be extended up to two additional years at a market rate of interest. <br /> <br />Collateral:Loans must be supported by sufficient collateral, which will include personal guarantees and/or <br />corporate guarantees. <br /> <br />Reporting: <br />As a condition for receiving funding, all recipients are required to submit a brief report to the EDA within sixty <br />(60) days of receiving funds, specifying how the funds were used and providing evidence in the form of paid <br />invoices, statements or similar documentation. <br /> <br />Permitted Fund Uses: <br />Awarded funds may be used exclusively for current payroll obligations (may not include employees who have <br />been laid off), lease or mortgage payments, utilities, accounts payable, property taxes and other critical business <br />expenses that can’t be paid as a direct result of the COVID-19 pandemic. Awarded funds may not be used for <br />business owner’s/manager’s personal uses or expenses. <br /> <br />Ineligible Fund Uses: <br />Assistance cannot be provided to businesses or nonprofits that: <br />1.Do not have a physical business address within the City of Elk River <br />2.Are home-based businesses <br />3.Derive income from passive investments without operational ties to operating businesses <br />4.Primarily generate income from gambling activities <br />5.Generate any part of its income from adult-oriented or tobacco/vaping-related activities <br />6.Have no current or historical financial statements <br />7.Previously received emergency funds from the EDA <br /> <br />Since the release of this program we have received 14 inquiries and eight applications. Two applications did <br />not qualify as an eligible business affected by the Governor’s Executive Orders 20-04; 20-08 and notice of <br />ineligibility was provided to the applicants. One applicant withdrew their application because they were not <br />comfortable sharing their company financial information with the city. <br />The following application has been reviewed: <br /> <br />Pinnacle Foods, LP d.b.a. Perkins of Elk River <br />The applicant requested $5,000 in property tax relief for taxes payable in 2020 and has supplied a complete <br />application with supporting documentation. The applicant is an eligible business type noted in Executive <br />Orders 20-04; and 20-08. Pinnacle Foods, LP owns their building which has a property tax liability of <br />$32,486.00 payable in 2020, of which $16,243.00 is still due. The applicant is not in violation of any city codes, <br />ordinances, licensing requirements or delinquent taxes, bills, or charges due to the city. <br /> <br />Financial Impact <br />The EDA allocated funding of this program of up to $200,000 from the general microloan fund account. The <br />total financial impact if this application is approved is $5,000. A total of $5,000 is eligible for forgiveness under <br />the program. <br /> <br />N:\\Departments\\Community Development\\Economic Development\\EDA\\Administrative\\Agenda\\Joint Finance Committee Agenda <br />Packets\\2020\\06302020\\4.1 sr COVID19 Small Business Emergency Microloan Program Applications.docx <br />