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~O~~I~~Gi~ rf-er~ X~I. <br />ic~l13I IO <br />~~~ <br />Elk REQUEST FOR ACTION <br />River <br />To Item Number <br />Economic Development Authority <br />Agenda Section Meeting Date Prepared by <br /> Decexnbex 13, 2010 Catherine Mehelich, Director of <br /> Economic Develo ment <br />Item Description Reviewed by <br />Consider Amendment to EDA Micro Loan to Promo Products <br /> Reviewed by <br />Action Requested <br />The EDA is asked to consider increasing the authorized Micro Loan to dae project by $5,000, fox a total <br />Micro Loan in the amount of $30,000. The company has agreed to an amortization period of 10-years. <br />Background/Discussion <br />At its November 2010 meeting the EDA approved the EDA Finance Conunittee's recommendation to <br />issue a Micro Loan to Promo Products, LLC with the following tex7ns and conditions: <br />Applicant: Promo Products, LLC (Andy Isle, President and Duane Hass, Director) <br />Structure: Participation loan with First National Bank of Elk River <br />Loan Terms: $25,000 at 3% interest, up to 20-year amortization/5-year balloon <br />Purpose: Assist in financing building improvements and fixtures including HVAC, fights, <br />flooring and office remodel <br />Security: 3rd position mortgage on real estate at 19228 Industrial Blvd, Elk River; and <br />personal guarantee from owners <br />Over the past month the company has been seeking bids for the renovations, which are coming in higher <br />than anticipated. This has required the project financing to be xe-evaluated. The bank and company have <br />requested the EDA's consideration of increasing die Micro Loan by $5,000. The EDA would retain its <br />security as originally proposed. <br />Financial Impact <br />The Micro Loan Fund has a current cash balance of approximately $1,042,254. The request increases the <br />EDA's loan to die project by an additional $5,000. <br />Attachments <br />ACtIOn Motion by Second by Vote <br />Follow Up <br />N:\Departmen[s\Communiry Development\Economic Development\Mi¢o Loan Fund\LOANS\Promo Pmdutts\12.13.10 EDA dc6on <br />Reques[ed.doc <br />