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Business Investment Page 2 of 5 <br /> <br />· Owners are expected to reside in the area. Under certain <br />circumstances, the owner residency requirement may be <br />waived. <br />· Job creation/j ob retention is required. Preference is given to <br />projects that offer job opportunities with livable wages, <br />provide broad employee benefits and leverage one job for each <br />$10,000 in loan funds. <br />· Local support must be proven, with preference given to <br />commumties that are establishing an integrated approach to <br />economic development planning. Businesses generally <br />considered ineligible include retail, consumer services, <br />conventional agricultural production and land development <br />enterprises. <br /> <br />Eligible uses of Loan Funds <br />Eligible project costs include land and buildings, construction, <br />remodeling, machinery and equipment, financing costs and working <br />capital. Ineligible uses include refinancing of debt, business <br />acquisition and non-owner occupied building construction. <br /> <br />Interest Rate/Loan Repayment Terms <br />Interest rates are determined on a case by case basis, but generally are <br />below market rate. Rates are fixed for the repayment term of the loan. <br />Repayment terms are generally determined by the useful life of the <br />collateral securing the loan, consistent with conventional lending <br />practices. However, Initiative Foundation loan dollars must be repaid <br />in full within ten years. <br /> <br />Credit Review/Collateral <br />Credit review criteria is consistent with most alternative lenders. All <br />required information must be supplied, adequate cash flow and debt <br />service must be clearly identified, and sales projections must be <br />supported. Owner commitment to the project must be shown, <br />generally in the form of owner equity in the project, and personal <br />guarantees for majority owners are required. <br /> <br />Proven management expertise and production experience must be <br />identified. As a gap lender, the Initiative Foundation considers higher <br />risk than conventional lenders in securing its loans. However, <br />collateral is required and evaluation of collateral is consistent with <br />conventional lending sources. <br /> <br />Application Process/Technical Assistance <br />Complete applications received by the 15th of each month will <br />generally be reviewed by the Initiative Foundation Loan Committee <br />by the 15th of the following month. Staff review of the application <br />includes a thorough analysis of application materials and a site visit <br />with owners. Incomplete applications may cause delay in review. <br /> <br />Local economic development professionals and Small Business <br />Development Centers are available throughout the Central Minnesota <br />region to assist new and expanding businesses. For a list of locally <br />supported technical assistance providers in the region, please contact <br />the Initiative Foundation office. <br /> <br />This program of the Initiative Foundation is supported in part by <br />Minnesota Department of Trade and Economic Development, the <br />USDA Office of Rural Development, The McKnight Foundation, <br /> <br />http ://www.ifound.org/html/businvt.htm 8/10/01 <br /> <br /> <br />