8.1. EDSR HANDOUT #1 12-13-2010~O~~I~~Gi~ rf-er~ X~I.
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Elk REQUEST FOR ACTION
River
To Item Number
Economic Development Authority
Agenda Section Meeting Date Prepared by
Decexnbex 13, 2010 Catherine Mehelich, Director of
Economic Develo ment
Item Description Reviewed by
Consider Amendment to EDA Micro Loan to Promo Products
Reviewed by
Action Requested
The EDA is asked to consider increasing the authorized Micro Loan to dae project by $5,000, fox a total
Micro Loan in the amount of $30,000. The company has agreed to an amortization period of 10-years.
Background/Discussion
At its November 2010 meeting the EDA approved the EDA Finance Conunittee's recommendation to
issue a Micro Loan to Promo Products, LLC with the following tex7ns and conditions:
Applicant: Promo Products, LLC (Andy Isle, President and Duane Hass, Director)
Structure: Participation loan with First National Bank of Elk River
Loan Terms: $25,000 at 3% interest, up to 20-year amortization/5-year balloon
Purpose: Assist in financing building improvements and fixtures including HVAC, fights,
flooring and office remodel
Security: 3rd position mortgage on real estate at 19228 Industrial Blvd, Elk River; and
personal guarantee from owners
Over the past month the company has been seeking bids for the renovations, which are coming in higher
than anticipated. This has required the project financing to be xe-evaluated. The bank and company have
requested the EDA's consideration of increasing die Micro Loan by $5,000. The EDA would retain its
security as originally proposed.
Financial Impact
The Micro Loan Fund has a current cash balance of approximately $1,042,254. The request increases the
EDA's loan to die project by an additional $5,000.
Attachments
ACtIOn Motion by Second by Vote
Follow Up
N:\Departmen[s\Communiry Development\Economic Development\Mi¢o Loan Fund\LOANS\Promo Pmdutts\12.13.10 EDA dc6on
Reques[ed.doc