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IX. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL <br />1. All applicants shall first contact a primary lending institution to determine if <br />additional equity is needed, and if so, how much. <br />2. The applicant and the primary lender shall then meet with City Staff to obtain <br />information about the Micro Loan program, discuss the project, and obtain <br />application forms. <br />3. The applicant shall complete and submit an application form to the City, along <br />with a processing fee of 1% of the loan request. (The fee is used to cover <br />processing expenses and will be returned only if application is denied.) The <br />applicant must provide evidence of their ability to meet the equity requirements <br />or provide a letter of commitment for conventional financing from the primary <br />lending institution. <br />4. The application will be reviewed by the City staff to determine if it conforms to <br />all City policies and ordinances and to consider the following: <br />a. The availability and applicability of other governmental grants and/or <br />loan programs. <br />b. Whether the proposed project will result in conformance with building <br />and zoning codes. <br />c. Whether it is desirous and in the best interests of the public to provide <br />funding for the project. <br />5. The EDA Finance Committee and EDA Commissioners will review each <br />application in terms of its consistency with the goals of the City's <br />Comprehensive Plan and Economic Development Strategic Plan and in relation <br />to the project's overall impact on the community's economy. Redevelopment <br />Loan applications will also be reviewed by an HRA member in conjunction with <br />the EDA Finance Committee. <br />They will also evaluate the project application in terms of the following: <br />a. Project Design -Evaluation of project design will include <br />review of proposed activities, time lines and a capacity to implement. <br />b. Financial Feasibility -Availability of funds, private involvement, financial <br />packaging and cost effectiveness. <br />• Appropriate ratio of private funds to Micro Loan funds. <br />• Sufficient cash flow to cover proposed debt service as <br />demonstrated by financial statements and projections. <br />• Business must show a positive net worth. <br />Elk River Economic Development Authority Page 6 of 15 <br />Micro Loan Fund Policy & Guidelines <br />1`~ Draft February 2006 <br />