6. EDSR 08-11-2008 - Laserfiche WebLink

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t ver MEMORANDUM TO: EDA Finance Committee Tim Simon, Finance Director FROM: Catherine Mehelich, Director of Economic Development DATE: August 6, 2008 SUBJECT: Consider Micro Loan Application -Pomeroy Tool, Inc. Attachments • Staff report to EDA Finance Committee dated April 14, 2008 re: Pomeroy Tool Application. • Revised Pomeroy Tool, Inc. Micro Loan Fund Application dated July 3, 2008 • Micro Loan Fund Policy & Guidelines Background At its April 14, 2008 meeting the EDA Finance Committee considered an application submitted by Mr. Long Do who is proposing to purchase and continue to operate the Pomeroy Tool, Inc. business in Elk River. The attached staff report to the committee provides additional background about the initial application and proposed project. Following the Finance Committee's review, the Committee recommended denial of the loan request due to concerns on the feasibility of the proposed project and encouraged the applicant to come back with a revised proposal. At its April 14`'' meeting the EDA accepted the Finance Committee's recommendation. Mr. Long Do has recently submitted the attached revised Micro Loan application for consideration. The loan request is the same in the amount of $100,000 for the purchase of existing equipment. Following are a few notable changes from the initial application: • Restructured project financing with Alliance Bank (St. Paul, MIS and SBA Guaranty • Owner cash equity contribution up to $65,000 for working capital • Seller loan (line of credit) up to $100,000 • Revised Pomeroy Tool, Inc. Business Plan dated May 15, 2008