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Consider EDA Micro Loan Application -Pomeroy "1'001, Inc. <br />April 14, 2008 EDA Finance Corruruttce Meeting <br />Pagc 2 of 2 <br />• Equity: 10% of project <br />• Private Financing: 50% of project <br />• 1 job created per $20,000 loaned <br />• Minimum wage of $15 per hour <br />Pomero,~, Inc. <br />• Amount requested: $100,000 <br />• Rate requested: fixed, 2 below prime <br />• Equity proposed: 10% of project <br />• Private Financing: 75% of project <br />• 1 job retained/created per $16,600 loaned <br />• Minimum wage of $15 per hour <br />In accordance with the MN Business Subsidy Law, any loan amount over $75,000 requires a <br />Business Subsidy Agreement for job and wage goals to be created as a result of the assistance, <br />and a requirement to continue operations in Elk River for 5-years. In addition, the Subsidy Law <br />requires approval by the local elected body. Following review and approval by the EDA at its <br />April 14`" meeting, staff anticipates the City Council's consideration for final approval at its <br />Apri121, 2008 meeting. <br />Requested Action <br />The EDA Finance Committee is asked to provide a recommendation to the EDA and Ciry <br />Council for approval of the micro loan with the following terms and conditions: <br />Participation Loan: The Bank of Elk River <br />Loan Amount: $100,000 <br />Interest Rate: fixed, 2 points below prime <br />Term: 10-year amortization; 5-year balloon <br />Security: 2°d position lien on related equipment purchase <br />Business Subsidy: Execution of a Business Subsidy Agreement for the retention of <br />4 full-time employment positions, and the creation of 2 full-time <br />positions at wages not less than $15.00 per hour within 2-years of the <br />loan closing. <br />Attachments <br />• Micro Loan Fund Policy & Guidelines <br />• Pomeroy Tool, Inc. Micro Loan Fund Application and related attachments <br />S:\EDA\Micro Loan Fund\Finance Committee\2008\Pomeroy Tool\4.14.08 Finance Comm.doc <br />