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Micro Loan Policy Amendment Issues Updated from Feb. 18, 2003 cormmttee Meeting Page 2 of 3 4. Equity (Page 2 & 3): Staff recommends including language specifying the following: At least 50% of the total project cost must be privately financed through owner equity and other lending sources. Committee suggested using SBAS04 loan requirements _For language. Consensus was that at least 10% o£the project r~. ust be ~om the owner's eqoJ~ and that at least of the project be privately F~anced through owner equity and other len~g sources. See SBA ~o~aHon attached as prodded by committee member McNMr. 5. Refinancing (Page 2 & 3): Staff questions for discussion: Should refinancing be allowed just to take advantage of lower rates? No Should a market rate be continued or stated as prime plusx ? MarIk-et Rate What criteria should be considered for refinancing/extensions, same application form? Written request and current Fznancial statements should be submitted for consideration. Staff recommends a processing fee be applied to cover legal and filing expenses. Typically staff is seeing these expenses range from I[500 - $1,000 total. $ 500 up~ontprocessing fee should be required on retTnancing requests. Staff recommends that the Finance Committee review all refinancing applications. Yes Staff recommends adding language that allows the EDA to require automatic payment be structured with the applicant's lender. Yes Discussion on remaining issues tabled until the next Committee meeting, Eligible Uses (Page 4): The EDA Board directed the Finance Cormxaittee to review and provide recommendation if "investment property development" be considered an eligible use of the Micro Loan. See page 4 of EDA 1-13-03 meeting minutes attached. Issue: If Micro Loan was used for building improvement/development but the business relocates or business is sold to different owner, should the loan be called due? Should all loans agreements be in the name of the business applicant to avoid such issues? e Industrial Incentive Program (Page 2): The Finance Committee discussed opening this program up to city-wide locations rather than targeting the West Business Park areas. See attached industrial business park sites and a copy of the Committee discussion notes from 6-20-99 and 8-21-97.