6. EDSR 07-10-2006 - Laserfiche WebLink

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ITEM # 6. ver MEMORANDUM TO: Economic Development Authority CC: Lori Stich, Accountant FROM: Heidi Steinmetz, Assistant Director of Economic Development ~~ DATE: July 10, 2006 SUBJECT: Consider Loan Extension Request: Lake Assault Custom Boats, LLC Attachments • Staff report to EDA Finance Committee, June 14, 2006 • Finance Committee Minutes, June 14, 2006 • Proposed amortization schedule Background In March of 2003, the EDA awarded a $50,000, 3.25% Micro Loan to Lake Assault Custom Boats, LLC. The loan was used to purchase machinery and equipment necessary fox the company to begin operations in Elk River in 7,500 square feet of space in the Decker building on East Highway 10. The loan is structured as a participation loan with The Bank of Elk River. Issue The balloon payment on this loan in the amount of X37,596.89 was due June 5, 2006. In accordance with the City's Micro Loan Policy, the company is eligible to be considered for a two-year extension at a market rate of interest. The company has fulfilled the goals of their job performance agreement with the EDA and has made consistent Micro Loan payments throughout the term of the loan. Finance Committee Recommendation The Finance Committee reviewed the extension request per the attached staff report at its June 14, 2006 meeting and recommended, per the attached minutes, that the EDA consider approval of a two-year extension with the following terms: • Prime rate of interest at 8% Loan repayment schedule to be adjusted retroactive as of the company's June 5, 2006 balloon payment due date