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ELK RIVER ECONOMIC DEVELOPMENT <br />MICRO LOAN FUND POLICY & GUIDELINES <br /> Revised September 1999 <br /> <br />PURPOSE <br /> <br />Tlxe Economic Development Authority for the City of ELk River (lEDA) recognizes <br />the need to snmulate private sector investment into manufacturing facilities and <br />equipment in order to create new jobs, boost productivity and retain emstmg jobs for <br />local residents. Additionally, the need e,-dsts to encourage investment in the <br />expansion and/or rehabilitation of commercial and retail buildings in order to <br />maintam the econom/c viability of Elk River's central business distract. <br />Subsequently, the purpose of this program is to provide lo~v interest, long-term (i.e. <br />greater than one year) loans as incentives for industrial development within the City <br />of ELk R/vet and to encourage commercial and retail business owners in the central <br />business district to rehabilitate the= existing buildings. <br /> <br />II. <br /> <br />LOAN PROG Pu~MS <br /> <br />In order to meet the economic and community development objectives of the EDA, <br />three distinct loan programs exist within the Micro Loan Fund to promote business <br />growth in Elk River. <br /> <br />Supplemental <br />Purpose: <br /> <br />Financing Program <br />The Supplemental Financing Program is designed for industrial forms <br />who have maximized their conventional financing and equity <br />resources and subsequendy would be unable to complete a project <br />without EDA assistance. <br /> <br />Amount: Up to $50,000 <br /> <br />Equity: <br /> <br />Must match EDA loan with 1:1 ratio. Total loans not to <br />exceed 90% of project value. <br /> <br />Kate: <br /> <br />FL:ed; 1 point below the lowest prime rate published in <br />the Wall Street Journal the day the loan is closed. <br /> <br />WerlTl~ <br /> <br />Financing up to 3-years. Loans may be amortized up to <br />15-years w~th a balloon payment. <br /> <br />Refmancmg: The loan may be refinanced up to 2 additional years at a <br /> market rate of interest. <br /> <br />Criteria: <br /> <br />1. Borrower must create one new fi&l-me job for each $20,000 loaned <br />within two years. Said jobs must pay a minimum average wage of $8 <br />per hour plus benefits. <br /> <br />2. Borrower must be an industrial firm and comply wi~ the provisions <br />of the city's industr/al and business park zoning ordinances. <br /> <br />Elk Fiver Econormc Development Author/ty <br />IVficro Loan Fmxd Policy & Guidelines <br /> <br />Page 2 of 8 <br /> <br /> <br />