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<br />ELK RIVER ECONOMIC DEVELOPMENT <br />MICRO LOAN FUND POLICY & GUIDELINES <br />Re,;}sed June 2004 <br /> <br />I. PURPOSE <br /> <br />TIle Economic Development .L\uthority for tlle City of Elk River (ED.L\) recognizes <br />tlle need to stimulate private sector investment into manufacturing facilities and <br />equipment in order to create ne\v jobs, boost productivity and retain existing jobs for <br />local residents. ~~dditionally, the need exists to encourage investment in tlle <br />expansion and/ or rellabilitation of commercial and retail buildings in order to <br />maintain tlle economic \riability of Elk River's central business district. <br />Subsequently, tlle purpose of tllls program is to provide lo\v interest, long-term (i.e. <br />greater than one year) loans as incenti\TeS for industrial development \v-itllln the City <br />of Elk River and to encourage commercial and retail business o\vners in tlle central <br />business district to rellabilitate tlleir existing buildings. <br /> <br />II. LOAN PROGRAMS <br /> <br />In order to meet the economic and community de\Telopment objecti'\les of tlle ED.L\, <br />t\vo distinct loan programs exist \vitllln tile 1{icro Loan Fund to promote business <br />grO\vtll in Elk Ri\rer. <br /> <br />Industrial Incentive Program <br />Purpose: TIle purpose of tile Industrial Incenti\Te Program is to encourage <br />industrial development tllat supports tlle tax base and brings quality <br />jobs to the city. <br /> <br />.L\mount: <br /> <br />Up to $100,000 of secondary financing not to exceed 200/0 of tlle <br />project cost. <br /> <br />Equity: <br /> <br />NIust have pri\rate-sector commitments for 500/0 of tlle project cost. <br />Borro\ver to prov-ide 100/0 or more of project fin all cing. <br /> <br />Rate: <br /> <br />FL"X:ed; 2 points belo\v the lo\vest prime rate publislled in <br />tile \'\!all Street Journal tile day tlle loan is closed, or 30/0, \vruclle"Ver is <br />greater. <br /> <br />Term: <br /> <br />Financing \Vitll a balloon payment in up to 5-years. Tile balloon <br />payment must not be longer tllan tlle balloon payment of the <br />pal1:icipating bank. Loans may be amortized up to the follo\ving <br />limits: <br /> <br />is-years on real estate uses; <br />lO-years on equipment uses. <br /> <br />Elk River Economic Development .;;\uthority <br />~,'ficro Loan Fund Policy & Guidelines <br />Revised June 2004 <br /> <br />Page 2 of 8 <br />