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3.9.D. SR 05-15-2006 City of Elk River REQUEST FOR COUNCIL ACTION Agenda Section Meeting Date Consent May 15, 2006 Item Number 3.9.D. Prepared by Catherine Mehelich, Director of Economic Develo ment Reviewed by Scott Clark, Community Development Director Item Description Consider Adoption of Amended Economic Development Micro Loan Fund Polic Introduction The City's Micro Loan Fund applications are reviewed, acted upon and administered by the EDA Finance Committee and EDA Commission. The EDA Finance Committee and the EDA Commissioners have recently reviewed and amended the Economic Development Micro Loan Fund Policy & Application. Discussion The attached policy includes the amendments noted in the February 13,2006 staff report and discussion at the EDA meeting. The HRA and HPC also provided input on the Downtown Rehabilitation Financing Program of the Micro Loan Fund. Financial Impact None Attachments . Economic Development Micro Loan Policy & Application, Amended May 2006 . Staff report to the EDA dated February 13, 2006 . Staff report to the EDA dated March 13, 2006 Action Requested The EDA recently reviewed and adopted the attached amended Micro Loan Policy. Staff requests the City Council consider adoption of the amended Economic Development Micro Loan Policy. Council Action Motion by _ Second by _ Vote Follow Up s: \EDA \MicroLoan \Policy&App \2006 Policy & App \5.15.06 COUNCIL.microloan.doc ITEM # 7. MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development DATE: February 13, 2006 SUBJECT: Discuss Draft Amendments to Micro Loan Fund Policy Attachments · EDA Finance Committee Minutes, September 28, 2005 . 151 Draft Revised Micro Loan Fund Policy dated February 2006 Background At its September 28,2005 meeting, the EDA Finance Committee discussed the level of financial assistance provided to manufacturing companies entering the City of Elk River. The meeting minutes are attached. Issue Part of the Finance Committee's discussion led to the following suggested amendments to the Micro Loan Fund Policy: · All public financing assistance being requested for a project must be included in the project's sources and uses at the time of application. · Clarified that job creation goals could not be double-counted if the project is rec:eiving more than one type of public fmancing assistance. · Increase the amortization for real estate uses to 20 years. In addition the draft policy includes several staff suggested revisions. Staff Recommendation Staff recommends that the EDA review the draft revised policy and provide feedback on any additional revisions. Following the EDA's input staff will make the revisions and bring a final version back for EDA adoption at next month's regular meeting. Staff is also reviewing the City's Business Subsidy Policy, Tax Increment Financing Policy and Tax Rebate Financing Policy for amendments to be presented to the EDA for consideration in the next couple months. MEMORANDUM TO: Economic Development Authority FROM: Catherine Mehelich, Director of Economic Development DATE: March 13, 2006 SUBJECT: Discuss Draft Amendments to Micro Loan Fund Policy Attachment . 1 st Draft Revised Micro Loan Fund Policy dated February 2006 Background At its September 28, 2005 meeting, the EDA Finance Committee discussed the level of fmancial assistance provided to manufacturing companies entering the City of Elk River. The EDA reviewed a first draft of the amended Micro Loan Fund Policy at its February 13, 2006 meeting. The EDA suggested a revision to include "high technology businesses" as an eligible and desired applicant for the loan funds. In addition, it was suggested that staff request input on the provisions of the Redevelopment Financing component of the loan program from the Housing and Redevelopment Authority (HRA) and the Heritage Preservation Commission (HPC). Update The following suggestions were provided by the HRA and HPC with regard to the Redevelopment Financing Program: . Agreed on limiting the use of the program to the core Downtown District, with the understanding that it may be expanded to include the Central Business District sometime in the future. . Increase the amount ofloan funds from $50,000 to $75,000. . Increase the financing terms from a balloon payment in 3 years to allow up to 5 years. . Evaluate the minimum percentage of Micro Loan dollars that must be used toward building fa<;:ade and rear entrance improvements. . Directed staff to research the requirements that may be necessary for compliance with the Americans with Disabilities Act (ADA) and fire code. Staff is currently researching the ADA and fire code requirements that may apply to commercial building rehabilitation projects by having discussions with the City's Building Official and reviewing the City of Anoka's Central Business District Fire Protection Grant Program. Following this research staff anticipates presenting a revised Micro Loan Fund Policy and Application for the EDA's adoption at the April regular meeting. --, -~ The Light Industrial Hub of the Northwest Metro Economic Development Micro Loan Fund Policy & Guidelines And Application Amended: May 2006 Amended: June 2004 Adopted: September 1999 City of Elk River Economic Development Division 13065 Orono Parkway Elk River, MN 55330 763.635.1040 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND POLICY & GUIDELINES I. PURPOSE The Economic Development Authority for the City of Elk River (EDA) recognizes the need to stimulate private sector investment into manufacturing facilities and equipment in order to create new jobs, boost productivity and retain existing jobs for local residents. Additionally, the need exists to encourage investment in the expansion and/or rehabilitation of commercial and retail buildings in order to maintain the economic viability of Elk River's Downtown District. Subsequently, the purpose of this program is to provide low interest, long-term (i.e. greater than one year) loans as incentives for industrial development within the City of Elk River and to encourage commercial and retail business owners in the Downtown District to rehabilitate their existing buildings. II. LOAN PROGRAMS In order to meet the economic and community development objectives of the EDA, two distinct loan programs exist within the Micro Loan Fund to promote business growth in Elk River. Industrial Incentive Program Purpose: The purpose of the Industrial Incentive Program is to encourage industrial and high technology business development that supports the tax base and brings quality jobs to the city. Amount: Equity: Rate: Term: Extension: Up to $100,000 of secondary financing not to exceed 20% of the project cost. Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project fInancing. Fixed; 2 points below the lowest prime rate published in the Wall Street Journal the day the loan is closed, or 3%, whichever is greater. Financing with a balloon payment in 5-years. The balloon payment must not be longer than the balloon payment of the participating bank. Loans may be amortized up to the following limits: 20-years on real estate uses; 10-years on equipment uses. In the event that the Borrower is unable to obtain conventional financing to replace the Micro Loan at the end of fIve years, the loan may be extended up to two additional years at a market rate of interest. Micro Loan Fund Policy & Guidelines Amended May 2006 Page 2 of 14 Criteria: 1. Borrower must be an industrial or high technology firm and create one new full-time job for each $20,000 loaned within 2 years. Said jobs must pay a minimum wage of $10.00 per hour excluding benefits required by law. Loans in excess of $75,000 shall meet the attached City of Elk River Business Subsidy Policy for the creation of new jobs at a minimum wage of $15.00 per hour excluding benefits required by law, as well as a 5-year location requirement. In the case where the multiple sources of public financing are requested (e.g. Micro Loan and Tax Increment Financing) job creation goals shall not be double-counted. 2. Borrower must comply with the provisions of the city's Industrial and Business Park zoning ordinances as applicable. Downtown Rehabilitation Financing Program Purpose: The Downtown Rehabilitation Financing Program is available to business and property owners in the Downtown District (DD) for the rehabilitation and restoration of their buildings. Amount: Equity: Rate: Term: Extension: Criteria: Up to $75,000 of secondary financing (not to exceed 40% of the project cost. Must have private-sector commitments for 50% of the project cost. Borrower must provide 10% or more of project financing. Fixed at 2%. Financing with a balloon payment in up to 5-years. Loans may be amortized up to the following limits: 20-years on real estate uses; 10-years on equipment uses. In the event that the Borrower is unable to obtain conventional financing to replace the Micro Loan at the end of five years, the loan may be extended up to two additional years at a market rate of interest. 1. At a minimum, 20% of Micro Loan dollars must be used for the improvement of the building fa<;:ades. 2. Rehabilitation loans in the Downtown District are exempt from job creation and wage goals since the loan amount does not exceed $75,000 and does not qualify as a business subsidy by state law. 3. Borrower must be located in the Downtown District (DD) (see attached map). Micro Loan Fund Policy & Guidelines Amended May 2006 Page 3 of 14 lUflJ~ lshll1 I- ~ o Location Map <if N Case Number: DOWNTOWN DISTRICT (DD) III. USES 1. Permitted Fund Uses: a. Building construction b. Land acquisition c. Machinery d. Furniture, fixtures, and equipment (FF&E) e. Renovation and modernization of buildings f. Exterior renovation of retail, commercial and industrial buildings g. Public infrastructure needed for economic development expansions h. Investment real estate with a minimum of 50% of the space pre-leased 2. Ineligible Fund Uses: a. Expenditures for the construction and/or renovation of residential units b. Working capital c. Refinancing of existing debt d. Inventory IV. BUSINESSES ELIGIBILITY Any project meeting the above criteria, and located or proposed to be located within the city limits of Elk River as defined by this program, may be eligible for an Economic Development Micro Loan as further defIned herein: . Business must be a for-profIt corporation, partnership, or sole proprietorship. . Business must be a small business as defined by the Small Business Administration (SBA). . Business must have a positive net worth. . Religious, political, and pornographic enterprises are not eligible to use the Economic Development Micro Loan Fund. V. MICRO LOAN FUND TERMS & CONDITIONS 1. Loan Structure All Economic Development Micro Loans will be structured as participation loans and will be serviced by the project's primary lending institution. Such an arrangement allows for the central distribution and collection of funds and simplifIes the financing process for all parties involved. A participation agreement will be signed by the borrower, primary lender and the EDA. The agreement will include the following provisions, among others: . If Borrower does not meet the job and wage goals specifIed in the Subsidy Agreement, the interest rate will change to 2 points above the participating bank's rate, effective from the two year anniversary of the loan closing. Upon subsequent achievement of the jobs and wage goals, the interest rate will revert back to the rate when the loan was originated, effective from the date of attainment of the job and wage goals. Micro Loan Fund Policy & Guidelines Amended May 2006 Page 4 of 14 . If Borrower defaults on the loan, the EDA will collect all further payments during the default based on a pro-rata basis with the participating bank excluding the distribution of proceeds resulting from the foreclosure on collateral. The EDA may require additional agreements to be signed by the borrower (i.e. security agreement, personal guarantees, subsidy agreement). 2. Simultaneous Micro Loans The simultaneous use of different Micro Loan Fund Programs by anyone borrower or for anyone project is prohibited. 3. Call of Loan A loan shall become due and payable in full if a business relocates outside of the city of Elk River prior to the maturity date of the loan. 4. Late Payment Charge A late payment charge of 8% of the installment amount may be enforced. VI. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS All buildings which public funds will be used for construction or renovation are to be brought into conformance with city ordinances and state building codes. Repairs may include the following systems and portions of real property: a. Mechanical heating, plumbing, and electrical b. Structural; including the facade of the structure and energy related improvements. c. Hook-up to city services (i.e. water, sewer) d. ADA (Americans with Disabilities Act) improvements VII. LOAN SECURITY AND GUARANTEES Applicant must be able to secure the loan by providing the EDA with a minimum of a subordinate mortgage upon the building and/or assets or other approved collateral. Applicant must demonstrate the financial means to repay the loans, as determined by the Economic Development Authority. Whenever possible, personal guarantees will be made part of any loan agreement. VIII. TIMING OF PROJECT EXPENSES No project should commence until the Elk River Economic Development Authority has approved the loan application. Any costs incurred prior to the approval of the loan application are generally not eligible expenditures. No building construction should commence until the required City permits are secured. :Micro Loan Fund Policy & Guidelines Amended May 2006 Page 5 of 14 The applicant will be responsible for all legal, recording, and other fees required for protection of a security interest in the loan, payable by a non-refundable 1 % processing fee, which is paid at the time of application. IX. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. All applicants shall first contact a primary lending institution to determine if additional equity is needed, and if so, how much. 2. The applicant and the primary lender shall then meet with City Staff to obtain information about the Micro Loan program, discuss the project, and obtain application forms. 3. The applicant shall complete and submit an application form to the City, along with a processing fee of 1 % of the loan request. (The fee is used to cover processing expenses and will be returned only if application is denied.) The applicant must provide evidence of their ability to meet the equity requirements or provide a letter of commitment for conventional financing from the primary lending institution. 4. The application will be reviewed by the City staff to determine if it conforms to all City policies and ordinances and to consider the following: a. The availability and applicability of other governmental grants and/or loan programs. b. Whether the proposed project will result in conformance with building and zoning codes. c. Whether it is desirous and in the best interests of the public to provide funding for the project. 5. The EDA Finance Committee and EDA Commissioners will review each application in terms of its consistency with the goals of the City's Comprehensive Plan and Economic Development Strategic Plan and in relation to the project's overall impact on the community's economy. Rehabilitation Loan applications will also be reviewed by an HRA member in conjunction with the EDA Finance Committee. They will also evaluate the project application in terms of the following: a. Project Design - Evaluation of project design will include review of proposed activities, time lines and a capacity to implement. b. Financial Feasibility - Availability of funds, private involvement, financial packaging and cost effectiveness. . Appropriate ratio of private funds to Micro Loan funds. . Sufficient cash flow to cover proposed debt service as demonstrated by financial statements and projections. :rvricro Loan Fund Policy & Guidelines Amended May 2006 Page 6 of 14 . Business must show a positive net worth. . Letter of Commitment from applicant pledging to complete the project during proposed project duration, if the loan application is approved. . Letter of Commitment from other fInancing sources stating terms and conditions of their participation in the project if applicable. . SuffIcient collateral. c. All other information as required in the application and/or additional information as may be requested by the Economic Development Authority. d. Project compliance with all city codes and policies. e. Program Objectives - In addition to quality job and wage creation/retention requirements, the applicant must meet all Micro Loan Fund criteria and demonstrate how the proposed activities will meet at least one of the following objectives: . The project contributes to the fulf1llment of the city's approved and adopted economic development and/or redevelopment plans. . The project prevents or eliminates slums and blight. . The project increases the local tax base. . The project brings a structure into compliance with an existing building code violation. 6. A written request for an extension shall be accompanied by a copy of current fInancial statements and a $500 upfront processing fee. The processing fee is used to cover processing expenses and will be returned if request is denied. The application for an extension beyond the original term should include a letter of denial from a conventional lender. RefInancing will not be allowed solely for the purpose of reducing the interest rate due to lower market interest rates. 7. The EDA Finance Committee will recommend the approval, denial, or request a resubmission. A recommendation from the Finance Committee will be forwarded to the EDA for fInal action. Micro Loan Fund Policy & Guidelines Amended May 2006 Page 7 of 14 X. LOAN POLICY REVIEW The above criteria will be reviewed on an annual basis to ensure that the policies reflected in this document are consistent with the economic development goals set forth by the City. XI. RIGHT OF REFUSAL The Elk River Economic Development Authority may deny any project which it deems inappropriate according to the guidelines established in this document. XII. COMPLIANCE WITH MN BUSINESS SUBSIDY LAW Each company receiving assistance in excess of $75,000 from the EDA Micro Loan Fund shall be subject to the provisions and requirements set forth by Minnesota State Statute 116].993 and the attached City of Elk River Business Subsidy Policy. Micro Loan Fund Policy & Guidelines Amended May 2006 Page 8 of 14 -""'- Business Subsidy Policy Amended & Adopted: May 2006 Original Adopted: Housing & Redevelopment Authority City Council Economic Development Authority November 25,2002 November 25,2002 December 9, 2002 City of Elk River Economic Development Division 13065 Orono Parkway Elk River, :MN 55330 763.635.1040 CITY OF ELK RIVER POLICY AND PROCEDURES RELATING TO THE USE OF BUSINESS SUBSIDIES I. PURPOSE For the purposes oj this document, the term "Ci!J" shall include the Elk River Ci!J Council, Economic Development Authori!J, and Housing and Redevelopment Authori!J. The purpose of this policy is to establish guidelines and criteria regarding the use of business subsidies, such as tax increment financing (TIF), tax abatement, and other business subsidies for private development projects within the City of Elk River. This policy shall be used as criteria for providing subsidies, in addition to the requirements and limitations set forth by provisions of Minnesota State Statute 116].993 (MN Business Subsidy Law), and the City's policy and guidelines of the particular form of subsidy. These guidelines shall be used in processing and reviewing applications requesting business subsidy assistance. The fundamental purpose of business subsidies in the City is to encourage desirable development or redevelopment that would not otherwise occur "but for" the assistance provided through business subsidies. It is the intent of the City to provide business subsidies, as well as other incentives that the City may deem appropriate, at the shortest term required for the project to proceed. The City reserves the right to approve or reject projects on a case-by-case basis, taking into account established policies, specific project criteria, and demand on city services in relation to the potential benefits to be received from a proposed project. Meeting policy guidelines or other criteria does not guarantee the award of a business subsidy. Furthermore, the approval or denial of one project is not intended to set precedent for approval or denial of another project. Whenever possible it is the City's intent to coordinate the use of business subsidies with other applicable taxing jurisdictions. II. DEFINITION OF "BUSINESS SUBSIDY" The following types of assistance having a value in excess of $25,000 are defined as a "business subsidy" within the MN Business Subsidy Law: . State and local government agency grants; . Contributions of personal property, real property, or infrastructure; . The principal amount of a loan that exceeds $75,000 at rates below those commercially available; . Reductions or deferrals of taxes or fees; . Guarantees of any payment under any loan, lease, or other obligation; and, . Preferential use of government facilities. City of Elk River Business Subsidy Policy Amended May 2006 2 III. PUBLIC PURPOSE OBJECTIVES OF BUSINESS SUBSIDIES In accordance with the MN Business Subsidy Law, the City will consider using business subsidies to assist private development projects to achieve one or more of the following public purpose objectives: . To retain local jobs and/or increase the number and diversity of jobs that offer stable employment and/or attractive wages and benefits. · To enhance and diversify the City of Elk River's tax base. . To encourage additional unsubsidized private development in the area, either directly or indirectly through "spin off' development. . To achieve development on sites which would not be developed without business subsidies assistance. . To remove blight and/or encourage development of commercial and industrial areas in the city that result in higher quality development or redevelopment and private investment. · To offset increased costs of development of specific properties when the unique physical characteristics of the site may otherwise preclude private investment. . To create opportunities for the construction, operation and maintenance of affordable housing. IV. GENERAL POLICIES FOR THE USE OF BUSINESS SUBSIDIES A. Business subsidy assistance will be provided from the City, on a "pay-as-you-go" note method, to the developer if the business subsidy is tax increment financing or tax abatement. Requests for up front financing will be considered on a case-by-case basis. B. A developer requesting business subsidy assistance must demonstrate, to the satisfaction of the City, sufficient cash equity investment in the project as required within the City's policy for the particular form of subsidy. C. Business subsidy assistance will not be provided in circumstances where land and/or property price is demonstrated by the County Assessor to be in excess of fair market value. This would normally be where the acquisition price is more than 10% in excess of market value. D. A developer must be able to demonstrate to the City, or, if applicable, to the underwriting authority, a market-demand for a proposed project. E. Business subsidy assistance will not be used in cases where the subsidy would create an unfair and significant competitive financial advantage over other similar projects in the area. F. Business subsidy assistance will not be used for projects that would place extraordinary demands on city infrastructure and services. City of Elk River Business Subsidy Policy Amended May 2006 3 G. If requested by the City the developer shall provide adequate financial guarantees to ensure completion of the project, including, but not limited to: minimum assessment agreements, letters of credit, cash escrows, and personal guaranties. H. Each developer must be able to demonstrate to the City's satisfaction, an ability to construct, operate, and maintain the proposed project based on past experience, general reputation, and credit history. 1. If requested by the City, or its consultants, the developer shall provide sufficient market, financial, environmental, or other data relative to the successful operation of the project. 1. Projects receiving business subsidy approval from other affected taxing jurisdictions will be more favorably received by the City. V. GUIDELINES FOR COMMERCIAUINDUSTRIAL BUSINESS SUBSIDIES A. Business subsidies will not be used for retail or service businesses unless it is a redevelopment project that demonstrates that it will result in a substantial increase in tax base and a significant improvement in quality employment. B. The project must be consistent with the City's Comprehensive Plan, Land Use Plan, and Zoning Ordinances. C. The project must result in the retention of existing jobs that would be lost "but for" the proposed development or result an increase and diversification in local jobs. Business retention jobs will be considered on a one-for-one match to job creation only in cases where job loss is specific and demonstrable in accordance with the MN Business Subsidy Law. D. Specific wage and job goals will be determined by the City giving consideration to the particular form of the subsidy, nature of the development, the purpose of the subsidy, local economic conditions and similar factors. The recipient will have up to two years from the benefit date, which is the date that the recipient receives the subsidy, to meet the job and wage goals established by the City. E. The minimum wage for a job to be considered a new or retained job shall be $15.00 per hour, exclusive of benefits required by law. Deviations from the job and wage goal may be considered for projects that will result in a significant increase in tax base. Deviations less than the wage floor will be considered on a case-by-case basis and in accordance with the requirements of the MN Business Subsidy Law. F. Business subsidies will not be used for commercial/industrial projects that have a history of inconsistent compliance with applicable environmental rules and regulations. City of Elk River Business Subsidy Policy Amended May 2006 4 VI. GUIDELINES FOR REDEVELOPMENT AND RENOVATION BUSINESS SUBSIDIES In accordance with the MN Business Subsidy Law, the following forms of financial assistance related to redevelopment and renovation are not a "business subsidy": A. Assistance provided for the sole purpose of renovating old or decaying building stock or bringing it up to code, provided that the assistance is equal to or less than 50 percent of the total cost; B. Assistance for pollution control or abatement; C. Redevelopment when the recipient's investment in the purchase of the site and in site preparation is 70 percent or more of the assessor's current year's estimated market value. VII. SUBSIDY APPLICATION PROCESS AND PROCEDURE A. Application for business subsidies shall be made on the City's forms for the particular type of assistance. The application for business subsidies shall request information required within the City's policies on the particular form of subsidy including but not limited to; a detailed description of the project; a preliminary site plan; the amount of business subsidy requested; the public purpose of the project; the number and types of jobs to be created; the wages and benefits to be paid new employees; and verifiable funding sources and uses. B. Following a review by appropriate City Staff the application shall be referred to the either the Economic Development Authority, or Housing and Redevelopment Authority, for recommendation to the City Council for denial or approval. C. Before granting a business subsidy that exceeds $100,000, the City shall provide public notice and hold a hearing on the subsidy unless a hearing and notice on the subsidy is otherwise required by law. VIII. SUBSIDY AGREEMENT AND REPORTING REQUIREMENTS Each company receiving a business subsidy shall be subject to the subsidy agreement and reporting provisions and requirements set forth by the MN Business Subsidy Law and summarized below: A. Progress Reports The recipient shall file a report annually for two years after the receiving the subsidy or until all goals set forth in the subsidy agreement have been met, which ever is later. Reports shall be completed using the format drafted by the State of Minnesota and shall be filed with the City's Economic Development Division no later than March 1 of each year for the progress made the previous year. City of Elk River Business Subsidy Policy Amended May 2006 5 B. Maintain Facility The recipient agrees to maintain and operate its facility at the site where the subsidy is used for a period of five years after the date the subsidy is provided. C. Failure to Comply Businesses failing to comply with the subsidy agreement will be subject to fines, repayment requirements at the rate established within the MN Business Subsidy Law, and be deemed ineligible by the State to receive any loans or grants from public entities for a period of five years. City of Elk River Business Subsidy Policy Amended May 2006 6 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND APPLICATION I. CONTACT INFORMATION Legal Name of Business: Address: City / State / Zip Contact Person(s) Business Phone Fax Home Phone Email Check One: Proprietor Corporation Partnership Social Security No. Federal ID # State ID # II. NATURE OF LOAN REQUEST Which Micro-Loan Program are you applying for? Industrial Incentive Program Rehabiliation Financing Program Amount Requested: $ Total Project Cost: $ Type of project: New construction for a start up business. New construction for an existing business. On site expansion Equipment purchase Remodeling: (circle one) Commercial/Retail / Industrial Other Elk River Economic Development Authority Micro Loan Fund Application Revised June 2004 Page 9 of 14 Please give a brief summary of your business and its products or service: Please give a brief summary of the project: Please describe how this loan will impact your project: III. FINANCING Project Costs Land $ Site improvements $ Buildings (attach plans & costs) $ Equipment/Machinery /Fixtures (attach list and estimated costs) $ Remodeling $ Industrial Inventory /W orking Capital $ Other (attach description) $ Total Costs $ Comments: Elk River Economic Development Authority Micro Loan Fund Application Revised June 2004 Page 10 of 14 Proposed Sources of Financing SOURCE Bank Loan Bank Loan Other Private Funds Applicant Contribution Other Fed Grant/Loan State Grant/Loan EDA Micro Loan Tax Increment Financing Tax Abatement Total Financing Collateral Assignments To Bank 1 TERMS AMOUNT $ $ $ $ $ $ $ $ $ $ $ NAME Description of Collateral To Bank 2 To Private Sources To Other Sources To Federal Govt To State To EDA Micro Loan Value of Collateral Elk River Economic Development Authority Micro Loan Fund Application Revised] une 2004 Lien Position Page 11 of14 Book Value Cost Existing Liens Land $ $ $ Buildings $ $ $ Machinery & Equip. $ $ $ Other $ $ $ Other $ $ $ IV. JOB & WAGE GOALS Present # of Employees Total Payroll PI 'd th t 11 Jobs To Be Created* t . . b w.thin 2 ease proVl e e 0 owmg m ormation on 10 s you expect to create 1 -years. Average Are the Jobs Expected Number Hourly Annual Permanent or Hiring Job Title of Jobs Wage Salary Temporary? Date *If loan is for job retention only, please explain in Business Plan. Program Objectives (Check all that apply) _ The project contributes to the fulfillment of the city's approved and adopted economic development and/or redevelopment plans. _ The project prevents or eliminates slums and blight. _ The project increases the local tax base. _ The project brings a structure into compliance with an existing building code violation. IV. PROJECT CONTACTS Attorney Name Elk River Economic Development Authority Micro Loan Fund Application Revised June 2004 Page 12 of 14 Address Phone Accountant Name Address Phone Financing Sources (lenders, partners. etc...) Name Address Phone Name Address Phone Parent Company Name Address Phone Others Name Address Phone Name Address Phone v. ATTACHMENTS CHECK LIST Please attach the following: A) Written Business Plan: Elk River Economic Development Authority :Micro Loan Fund Application Revised June 2004 Page 13 of 14 1. Description of Business 2. Ownership 3. Management 4. Date Established 5. Products/Services 6. Future Plans B) Financial Statements for Past Two Years C) Financial Projections for Two Years D) Resume of Owner/Management E) Personal Financial Statements of Proprietor, Partners, Guarantors F) Letter of Commitment from Applicant Pledging to Complete During the Proposed Project Duration G) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project H) Fee (1 % of amount of loan request). VI. AGREEMENT I / We certify that all information provided in this application is true and correct to the best of my/our knowledge. I / We authorize the City of Elk River and the Finance Committee to check credit references and verify financial and other information. I / We agree to provide any additional information as may be requested by the City and the Finance Committee. APPLICANT SIGNATURE BY DATE Elk River Economic Development Authority Micro Loan Fund Application Revised June 2004 Page 14 of 14