Laserfiche WebLink
IV. BUSINESSES ELIGIBILITY <br />Any project meeting the above criteria, and located or proposed to be located within <br />the city limits of Elk River as defined by this program, may be eligible for an <br />Economic Development Micro Loan as further defined herein: <br />• Business must be afor-profit corporation, partnership, or sole <br />proprietorship. <br />• Business must be a small business as defined by the Small Business <br />Administration (SBA). <br />• Business must have a positive net worth. <br />• Religious, political, and pornographic enterprises are not eligible to use <br />the Economic Development Micro Loan Fund. <br />V. MICRO LOAN FUND TERMS & CONDITIONS <br />1. Loan Structure <br />All Economic Development Micro Loans will be structured as participation loans and <br />will be serviced by the project's primary lending institution. Such an arrangement <br />allows for the central distribution and collection of funds and simplifies the financing <br />process for all parties involved. A participation agreement will be signed by the <br />borrower, primary lender and the EDA. The agreement will include the following <br />provisions, among others: <br />If Borrower does not meet the job and wage goals specified in the Subsidy <br />Agreement, the interest rate will change to 2 points above the participating <br />bank's rate, effective from the two year anniversary of the loan closing. <br />Upon subsequent achievement of the jobs and wage goals, the interest rate <br />will revert back to the rate when the loan was originated, effective from the <br />date of attainment of the job and wage goals. <br />• If Borrower defaults on the loan, the EDA will collect all further payments <br />during the default based on a pro-rata basis with the participating bank <br />excluding the distribution of proceeds resulting from the foreclosure on <br />collateral. <br />The EDA may require additional agreements to be signed by the borrower (i.e. <br />security agreement, personal guarantees, subsidy agreement). <br />2. Simultaneous Micro Loans <br />The simultaneous use of different Micro Loan Fund Programs by any one borrower <br />or for any one project is prohibited. <br />3. Call of Loan <br />A loan shall become due and payable in full if a business relocates outside of the city <br />of Elk River prior to the maturity date of the loan. <br />4. Late Payment Charge <br />Micro Loan Fund Policy & Guidelines Page 5 of 14 <br />Amended December 2006 <br />