3.6. EDSR 05-11-2009 - Laserfiche WebLink

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MEETING OF THE EDA FINANCE COMMITTEE HELD AT THE ELK RIVER CITY HALL MONDAY, APRIL 27, 2009 Members Present: Cliff Lundberg, Paul Motin, Nate Oval, Larry Toth, Dan Tveite and Chris Carlson Members Absent: None Staff Present: Director of Economic Development Catherine Mehelich, Economic Development Assistant Annie Deckert Accept EDA Finance Committee Minutes Motion by Tveite, second by Toth to accept the December 18, 2008 EDA Finance Committee Minutes as presented. The motion carried 6-0. Ms. Mehelich welcomed new Finance Committee member, Nate Oval, representing The Bank of Elk River. 2. Discuss Micro Loan Reduest• Nicole's Finishing Touch Salon, Inc Ms. Mehelich summarized the Micro Loan restructuring request from Nicole's Finishing Touch Salon, Inc. She indicated staff's concerns regarding placing additional securities and/or setting additional expectations for the loan. The original terms of the loan were fora 2-year term, 3% fixed rate, direct loan with the EDA, and secured by a personal guaranty from the owner. In January of 2009, following review and recommendation from the Finance Committee, the EDA approved a 1-year extension on the loan terms in order to reduce the monthly payment to assist the business cash flow. The applicant, Nicole Fox, along with her step-father, Joe Brandenburg, are requesting EDA consideration of restructuring the micro loan payments to an amount which can be realistically handled by the business's strained cash flow. Mr. Brandenburg has indicated to staff that Ms. Fox can handle a monthly payment of $250. Ms. Mehelich inquired about the current balances of the bank loans. Mr. Oval indicated the combined balance of the SBA and build-out loan were approximately $100,000. He also stated that Ms. Fox had attended a Business Network International (BNI) meeting with him, and has been working on her marketing efforts by meeting weekly with Stephanie Danielson, realtor for the residential portion of the Bluff's building. Mr. Brandenburg, stepfather to Ms. Nicole Fox, owner of Nicole's Finishing Touch Salon, Inc, provided an update on the status and future plans for the business. Mr. Brandenburg indicated the empty building, current state of economy and unexpected build-out costs and City fees have made it difficult to survive. He stated that they have worked with The Bank of Elk River to lower the interest rate and lengthen the term of their loans. They have also worked with MinnWest bank to lower her monthly rent payments. Mr. Brandenburg informed the committee that he has purchased Ms. Fox new equipment to offer additional services and have replaced prior employees with new employees which better fit the salon and increase the marketability of the business. They have also restructured employees pay-scales to assist the cash flow. He indicated that he had replaced her prior financial tracking system with a new system, which would accurately track her cash flow, providing a better picture on how the business is doing. At this time, Nicole has made several lifestyle adjustments to accommodate her cash flow situation. Mr. Brandenburg indicated Ms. Fox is extremely active in donating gift cards and services to several community events, silent auctions and area schools. Ms. Fox indicated that she did have a business plan when she opened her business; however, with the current unpredictability of the economy, it was tough to maintain an accurate plan. She also indicated that her prior financial tracking system was not accurate and made it difficult to gauge how her business