6.0. EDSR 12-11-2000 ELK RIVER ECONOMIC DEVELOPMENT AUTHQTY
MEMORANDUM
TO: Elk River Economic Development Authority
FROM: Marc Nevinski, Assistant Director of
Economic Development
DATE: December 11, 2000
SUBJECT: Subordination Request - ProTech Engineering
Micro Loan
Issue
The Bank of Elk River is requesting that the EDA subordinate its first position on
ProTech Engineering's accounts payable as collateral on a $25,000 line of credit.
Background
In November of 1999, ProTech Engineering, a startup mold manufacturer, received a
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$50,000 Micro Loan from the EDA to purchase machinery and equipment. To date,
the company, located in the Decker Building,has hired two full time employees as
well as a parttime position. The company has also met its sales goal for the year of
$500,000. The loan repayment history is excellent.
To ensure the EDA's collateral position, staff filed a blanket UCC-1at the time of the
loan and holds a first position on the company's accounts, inventory, documents,
fixtures and the like, along with a second position on four pieces of equipment.
Action Requested
Staff recommends that the EDA consider approving the request by The Bank of Elk
River to subordinate its first position on ProTech Engineering's accounts receivable.
13065 Orono Parkway • P. 0. Box 490 • Elk River, MN 55330-1743 • (612) 441-7420 • Fax (612) 441-7425
Equal Opportunity Housing and Equal Opportunity Employment