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<br /> <br />https://coermn.sharepoint.com/sites/EconomicDevelopment/Shared Documents/Economic Development/EDA/Administrative/Agenda/Joint <br />Finance Committee/2024/05-14-2024/4.1 sr Heritage Microloan.docx <br />The applicant’s S/U statement indicates the company will be contributing $2,116,947 <br />in cash equity, or 10% of total project costs. new equipment. This includes <br />approximately $12MM for facility construction and $5MM in equipment. <br /> <br />Criteria: All new jobs must be created within two years and retained for the period of the loan. Said jobs <br />must pay greater of $15.00 per hour or 150% of state or federal minimum wage ($15.12), <br />exclusive of benefits required by law. Any loans shall meet the city of Elk River Business <br />Subsidy Policy for the creation of new jobs, as well as a 5-year location requirement. <br /> <br />All positions are in excess of the wage requirement of $15.12, as the lowest hourly wage <br />for all positions is $21.00 per hour. <br /> <br />Summary <br />The applicant is eligible for a maximum loan of $200,000 per the city’s policy, meeting the equity, wage, <br />and job criteria requirements and the proposed fund uses are eligible expenses. The project scored 42 out <br />of 50 points, representing a highly desirable project. <br /> <br />Terms <br />The loan will be amortized over 10 years at 3% with a 5-year balloon payment. The EDA would retain a <br />3rd position on the equipment behind the principal lender First Bank Elk River and Small Business <br />Administration. Staff and the applicant have discussed securing the loan with a personal guarantee. <br /> <br />Financial Impact <br />If the committee agrees this loan meets the goals of the city and EDA, the loan funds could be funded <br />from the DEED account, which has a balance of $439,246.36. Similarly, it could be funded from the <br />EDA’s Business Microloan Fund which has a balance exceeding $1,000,000. <br /> <br />Attachments <br />▪ Microloan Application <br />▪ Scoring Worksheet <br />▪ Company Information <br />▪ Commitment Letter from the First Bank Elk River <br />▪ Microloan – Additional Information <br />▪ Company Financials (confidential, available at the meeting) <br /> <br />