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III. USES <br />1. Permitted Fund Uses: <br />a. Building construction <br />b. Land acquisition <br />c. Machinery <br />d. Furniture, fixtures, and equipment (FF&E) <br />e. Renovation and modernization of buildings <br />£ Exterior renovation of retail, commercial and industrial buildings <br />g. Public infrastructure needed for economic development expansions <br />h. Investment real estate with a minimum of 50% of the space pre-leased <br />2. Ineligible Fund Uses: <br />a. Expenditures for the construction and/or renovation of residential units <br />b. Working capital <br />c. Refinancing of existing debt <br />d. Inventory <br />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 EDA Micro Loans will be structured as participation loan~~ and will be serviced by <br />the project's primary lending institution. Such an arrangement allows for the central <br />distribution and collection of funds and simplifies the financing process for all <br />parties involved. A participation agreement will be signed by the borrower, primary <br />lender and the EDA. The EDA may require additional agreements to be signed by <br />the borrower (i.e. security agreement, personal guarantees, job performance <br />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 EDA loan. <br />Elk 12iver Economic Development Authority <br />Micro Loan Fund Policy & Guidelines <br />Kevised June 2004 <br />Page 4 of 8 <br />