5.0. & 5.1. & 5.2. EDSR 04-14-2008

Home Browse Search

Consider EDA Micro Loan Application -Sportech, Inc. April 8, 2008 EDA Finance Comrruttee Meeting Page 2 of 2 Sportech, Inc. is requesting an EDA Industrial Incentive Micro Loan of $100,000 toward the purchase equipment, of which the the EDA would obtain a 15i position lien. In addition to the financial criteria that must be considered, the Finance Committee must also consider to what degree the applicant satisfies the criteria set forth in the Micro Loan Fund policies outlined below: Micro Loan Criteria • Max. Loan Amount: $100,000 • Interest rate: fined, 2 below prime • Equity: 10% of project • Private Financing: 50% of project • 1 job created per $20,000 loaned • Minimum wage of $15 per hour St~ortech, Inc. • Amount requested: $100,000 • Rate requested: fixed, 2 below prime • Equity proposed: 24% of project • Private Financing: 64% of project • 1 job created per $16,700 loaned • 6 jobs created at $15+/hr wage (in addition to 19 new jobs at $12-14/hr In accordance with the MN Business Subsidy Law, any loan amounts over $75,000 require a Business Subsidy Agreement for job and wage goals to be created as a result of the assistance. The Business Subsidy Agreement for this project will include the EDA Micro Loan, Tax Abatement and MN Investment Fund Loan as a package to be considered fox approval following public hearing at the April 14``' EDA meeting and April 21 S` City Council meeting. Requested Action The EDA Finance Committee is asked to provide a recommendation to the EDA fox approval of the micro loan with the following terms and conditions: Loan Amount: $100,000 Interest Rate: fixed, 2 points below prime Term: 10-year amortization; 5-year balloon Security: 15C position lien on related equipment purchase Attachments • Micro Loan Fund Policy & Guidelines • Sportech, Inc. Micro Loan Fund Application and related attachments S:\Industrial Siting\Sportech Expansion II\Memos\4.8.08 Finance Comm.doc