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INFORMATION 04-21-2003Pdver MEMORANDUM TO: FROM: DATE: SUBJECT: Mayor & City Council Catherine Mehelich, Director of Economic Development//~ April 2 I, 2003 Revised Economic Development Micro Loan Policy Attachments · Staff memo to EDA re: Amendments to Micro Loan Policy, April 14, 2003. At its April 2003 meeting the EDA unanimously adopted the recently revised Economic Development Micro Loan Policy. The attached staff memo summarizes the primary amendment issues of the policy. No action is necessary from the City Council, since the EDA has been given primary management authority over the Micro Loan program. Please feel free to contact me if you have any questions regarding the revised policy. MEMORANDUM TO: FROM: DATE: Economic Development Authority Catherine Mehelich, Director of Economic Development//~ April 14, 2003 SUBJECT: Consider Amendments to the Micro Loan Policy Attachments · Micro Loan Fund Policy, Revised Sept. 1999 · City of Elk River Business Subsidy Policy · Draft - Micro Loan Fund Policy, Revised April 2003 · Finance Committee Meeting Notes and Minutes · Note from Kermit Bode, Custom Cutter Grinding - Feb. 2003 Issue Over the past several months staff has been working with the EDA Finance Committee to revisit the Micro Loan Policy for any amendment issues. Minutes from the Finance Committee meeting discussions are attached. A final draft of the revised Micro Loan Policy, as well as the original version, is attached for the EDA's consideration. Following the EDA's review and discussion, if there aren't any revisions, staff recommends the EDA consider adoption of the amended Micro Loan Policy. Primary Amendment Issues The following items are the primary amendment issues reflected in the attached revised policy: Clarification of lending amount, equity requirements, terms and extensions for each financing program (II. Loan Programs). Established an interest rate floor of 2% for each financing program (II. Loan Programs). [] Revised wage goal for the Supplemental Financing Program from a minimum wage of $8/hour to $9/hour (II. Loan Programs). Micro Loan Policy Amendments April 14, 2003 - EDA Page 2 of 2 [] Addition of "Investment real estate" as a permitted fund use, ~vith a 50% pre-lease requirement (III. Uses). [] Addition of a late payment charge of up to 8% (V. Micro Loan Fund Terms & Conditions). Addition of hook-up to city services as a repair that may be required for the request of public funds for building projects (VI. Regulation For New Construction and Improvements). Addition of procedures for extension requests (IX. Procedural Guidelines for Application and Approval). It is the committee's understanding that these requests will go through a review by the Finance Committee for recommendation to the EDA for formal action. [] Reference to the City's Business Subsidy Policy for projects receiving assistance over $75,000 (XI. Compliance with State Statutes). Several issues were also discussed by the Finance Committee but ultimately received consensus for not revising, such as the limitation of the Industrial Incentive Program to projects in the West Business Park. The minutes of the Finance Committee meetings should reflect these issues of discussion. Recommendation Staff recommends that the EDA review the revised Micro Loan Policy, provide comment, and adopt the amended Micro Loan Policy with recommendations to be incorporated into the final version. Related Note On related note, the follo~ving Micro Loans have recently been paid in full: · Carpe IYmiros (Custom Cutter Grinding) · Sportech, Inc. · ProTech Engineering City of 12rive r Economic Development Micro Loan Fund Policy & Guidelines And Application Revised: September 199 City of Elk River Economic Development Authority 13065 Orono Parkway, P.O. Box 490 Elk River, M2q 55330 (763) 441-7420 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND POLICY & GUIDELINES Revised September 1999 PURPOSE Tlxe Economic Development Authority for the City of ELk River (lEDA) recognizes the need to snmulate private sector investment into manufacturing facilities and equipment in order to create new jobs, boost productivity and retain emstmg jobs for local residents. Additionally, the need e,-dsts to encourage investment in the expansion and/or rehabilitation of commercial and retail buildings in order to maintam the econom/c viability of Elk River's central business distract. Subsequently, the purpose of this program is to provide lo~v interest, long-term (i.e. greater than one year) loans as incentives for industrial development within the City of ELk R/vet and to encourage commercial and retail business owners in the central business district to rehabilitate the= existing buildings. II. LOAN PROG Pu~MS In order to meet the economic and community development objectives of the EDA, three distinct loan programs exist within the Micro Loan Fund to promote business growth in Elk River. Supplemental Purpose: Financing Program The Supplemental Financing Program is designed for industrial forms who have maximized their conventional financing and equity resources and subsequendy would be unable to complete a project without EDA assistance. Amount: Up to $50,000 Equity: Must match EDA loan with 1:1 ratio. Total loans not to exceed 90% of project value. Kate: FL:ed; 1 point below the lowest prime rate published in the Wall Street Journal the day the loan is closed. WerlTl~ Financing up to 3-years. Loans may be amortized up to 15-years w~th a balloon payment. Refmancmg: The loan may be refinanced up to 2 additional years at a market rate of interest. Criteria: 1. Borrower must create one new fi&l-me job for each $20,000 loaned within two years. Said jobs must pay a minimum average wage of $8 per hour plus benefits. 2. Borrower must be an industrial firm and comply wi~ the provisions of the city's industr/al and business park zoning ordinances. Elk Fiver Econormc Development Author/ty IVficro Loan Fmxd Policy & Guidelines Page 2 of 8 Redevelopment Financing Program Purpose: The Redevelopment Financing Program is available to business and proper~y owners m the central business disrmict (CBD) for t_he rehabilitation ,~nd restoration o£ their buildings. Amount: Up to $50,000 Equity: Must match EIDA loan with 1:1 ratio. Total loans not to exceed 90% of project value. R. ate: WelT%l' FLxed; 2 points below the lowest pm'ne rate published in the Wall Street Journal the day the loan is closed. Financing up to 3-years. Loans may be amortized up to 15-years with a balloon payment. Refinancing: The loan may be refinanced up to 2 additional years at a market rate of interest. Criteria: 1. At a minimum, 20% of Micro Loan dollars must be used for the improvement of the buildmg's facade. 2. Borrower must be located in the Central Business District (see attached marl). Industrial Incentive Program Purpose: The purpose of the Industrial Incentive Program is to encourage industrial development that supports the tax base and brings quality jobs to the city. Amount: Up to $100,000 Equity: Must match EDA loan with a 3:1 ratio. Total loans not to exceed 90% of project value. FL:ed; 4 points below the lo,vest prime rate Published in the Wall Street Journal the day the loan is closed. Financing up to 5 years. Loans may be amort2ed up to 15-years with a balloon payment. Refinancing: The loan may be refinanced up to 2 additiona} years at a market rate of interest. Criteria: 1. Borrower must be an industrial firm and create one nexv full_t2me job for each $20,000 loaned within 2 years. Said jobs must pay a mimmum average wage of $10 per hour plus benefits. Elk River Econormc Development Authority Micro Loan Fund Policy & GuideLines Page 3 of 8 i11. 2. Borrower must locate in the West Business Park (see attached m~) and comply with the provisions of the city's industrial and business park zoning ordinances. USES 1. Permitted Fund Uses: a. Building consr_mction b. Land acquisition c. Machinery d. Furniture, fLxtures, and eqmpment (FF&E) e. Renovation and modermza~on of buildings f. Exterior renovation of retail, cormnercml and indust_dal buildings g. Public infrastructure needed for economic development expansions 2. Ineligible Fund Uses: a. Expenditures for the construction and/or renovation of residential units b. Working capital c. Refinancing of e,,dstmg 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 corp0radon, partnership, or sole proprietorship. · Business must be a small business as defined by the Small Business Admimstration (SBA). · Business must have a positive net worth. · Religious, political, and porno~aphic enterprises are not eligible to use the Economic Development Micro Loan Fund. MICRO LOAN FUND TERMS 8,: CONDITIONS. 1. Loan Structure Ail EDA Micro Loans will be sunacrured as partidflation loan-~' and will be serviced by the project's pm-nary lending institution. Such an arrangement allows for the central distribution and collection of funds and sWnplifies the financing process for all parties involved. A participation a~eement will be sig-ned by the borrower, primary lender and the EDA. 2. Simultaneous Micro Loans The simultaneous use of different Micro Loan Fund Programs by any one borrower or for any one project is prohibited. Elk River Economic Development Authority lVficro Lo~ Fund Policy & Guidelines Page 4 of 8 VI. 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 EDA loan. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS All buildings within -,vkich public funds will be used for consr_t-uction or renovation are to be brought into conformance with city codes and policies. Rep"UZs 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 m2provements. 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 d~e loans, as determined by the Economic Development Authority. Whenever possible, personal guarantees ~viil 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 applicati%n are generally not eligible expenditures. No building construction should commence until the required City permits are secured. The applicant will be responsible for all legal, recording, and other fees required for protection of a security interest in the loan. IX. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. Ail applicants shall first contact a primary lending institution to detenZUZe if additional equity is needed, and if so, how much. .. The applicant and the pzirnary lender shall then meet with City Staff to obtam information about the Micro Loan program, discuss the project, and ohom application forms. The applicant shall complete and submit an application form to the City, along "V~th a processing fee of 1% of the loan request. (The fee is used to cover processing expenses and will be returned if application is demed.) The applicant must provide evidence of their ability to meet the equity reqm-rements or provide a letter of commttment for conventional financing from the primary lending institution. Elk River gconormc Development Authority Niicro Loan Fund Policy & Gmdelmes Page 5 of 8 The application will be reviewed by the C~ty staff to determine if it conforms to alt 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 ~vith building and zoning codes. c. Whether it is desirous and in the best interests of the public to provide funding for the project. The EDA Finance Committee and EDA Commissioners will review each application m terms of its consistency with the goals of the Growth Management, Strategic, and Economic Development Plans and in relation to the project's overall anpact on the community's economy. Redevelopment Loan applications will also be reviewed by an HP~ member in conjufict/on with the EDA Finance Committee. They will also evaluate the project application in terms of the following: a. Project Design - Evaluation of project desig'n 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 lVficro Loan funds. · Sufficient cash flow to cover proposed debt.service as demonstrated by financial statements and projections. · Business must show a positive net worth. Letter of Cornm/nnent 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. All other information as required in the application and/or add/rional information as may be requested by the Economic Development Authority. d. Project compliance with all city codes and pohcies. Elk Ikiver ]Econormc Development Authority Micro Loan Fund Policy & Gmdelines Page 6 of 8 e. Prog'ram Objectives - In ad&non to job and ~vage requirements, the applicant must meet all Micro Loan Fund criteria and demonstrate how the proposed activines will meet at least one of the following objectives: The project contributes to the fulf21rnent 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 ~trucmre into compliance with an e:dstmg building code violation. -- The EDA Finance Committee will reconnnend the approval, denial, or request a resubmission. A recommendation from the Finance Com-rmttee will be forwarded to the EDA for final action. Xo Xl: LOAN POLICY REVIEW The above criterm will be reviewed on an annual basis to ensure that the policies reflected in this document are consistent ~vith the economic development goals set forth by the City. COMPLIANCE WITH STATE STATUTES Each company receiving assistance in excess of $25,000 from the EDA Micro Loan Fund sh,qll be subject to the provisions and requirements set forth by Minnesota State Statute 116j.993 and summarized below. Progress Reports The borzo~ver shall file a report annually for two years after the closing of the loan or until all goals set forth in the application have been meet, which ever is later. Reports shall be completed using the format dzafted by the State of Minnesota and shall be filed with the City no later than March 1 of each year for the previous year. Businesses fulfilling job Creation requirements must file a report with the city no later than 30 days after the deadline. Maintain Facility The borrower agrees to maintain and operate its facility at the site where the loan is used for a period of five years after the date the loan is closed. Goal Attainment In ad&non to attaining or exceeding the jobs and wages goals set forth in Section IV of the Application, the borrower agrees to achieve at least one of the goals for community development set forth in Secnon Pi, part 5, subdivision (e) of the Micro Loan Fund policy. Elk thver Economic Development Authomty iVficro Loan Fund Policy & Guidelines Page 7 of 8 Redevelopment loans in the cent. tM business district are exempt from job creation .~nd wage goals stated in Section DJ, part 5, subdivision (e) provided the loan amount does not exceed 50% of the project cost. Failure to Comply Businesses failing to comply with the above provisions will be subject to £mes, repayment reqmrements, and be deemed ineligible by the State to receive any loans or grants from public enddes for a per/od of five years. Xll. 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. Elk Paver Economic Development Authority Micro Loan Fund PoEcy & Guidelines Page 8 of 8 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND APPLICATION i. CONTACT INFORMATION Company: Address: City. / State / Zip Contact Pe:son(s) Business Phone l:~qX Home Phone Em~ Check One: __ P:oprietor __Corporation Parme~:sbip Social Security No. Federal ID # State ID ~ !i. NATURE OF LOAN REQUEST Which Micro-Loan Program aze you applying for.; Supplemental Financing Program __ Redevelopment Financing Pzogram __ Industrial Incentive Prog~:am Amount Requested: Total Project Cost: Type of project: __ New construction for a start up btzsmess. __ New construction for an e.,dstmg business. __ On site expansion __ Equipment purchase __ RemodeLing: (Sfr~k 0tie) Commercial / Retail / Indusrri.ql ~.Othez Please ~ve a brief summ:zry o£your business and its products or service: Please give a brief summary of r. he project: Please describe how this loan will impact your project: !!i. FINANCING Project Costs Land Site improvements Buildings (attach plans & costs) Equipment/Machimery / FLxrures (attach list and estimated costs) Remodeling Industrml Inventory/Working Capital O~er (attach descr/ption) Total Costs Comments: Elk River Econormc Development Authority Nficro Loan Fund Application Page 2 of 7 Proposed Sources of Financing SOURCE NAME Bank Loan Bank Loan Other Pzivate Funds Applicant C ontrsbution Other Fed Grant/Loan State Grant/Loan ED.A_ Mic~:o Loan Total Financing Comments: TER_MS AMOUNT $ $ $ $ $ $ $ $ $ Collateral Assignments To Bank 1 To Bank 2 ~ To Private Souzces To Other Sources To Fedez21 Govt To State To EDA lVficro Loan Comments: Description of Collateral Lien Position Elk River Economic Development Authority Micro Loar~ Fund AppticaUOn Page. 3 of 7 Value of Collateral Book Value Cost Land $ $ $ Buildings $ $ $ Machinery & Equip. $ $ $ Other $ $ $ Other $ $ $ E:dsr. mg Liezs C oI'lxrllerlts: IV. JOB & WAGE GOALS P~:esent ~ of Employees Total Pay:oil Jobs To Be Created* Please ~rovide the following reformat/on on jobs you expect to create. ' Average ~e th~ Jobs Expected Number Hourly Annual Permanent or H/ring Job Tide of Jobs Wage Salary. Temporary? Date *If loan is for job retennon only, please exptam in Business Plan. Job Creation Timetable Please md/cate on the ruble below when md/vidual jobs will be added to the ~. Number Qtr. Q=. I Q=. Qtz. Qtr. Qtr. Qtr. Qtr. Job Tide of Jobs 1° I. 3 4 5 6 7 8 Elk River Econonnc Development Author/v/ Nficro Loan Fund Applicanon Page 4 of 7 IV. PROJECT CONTACTS ~T 9.i'1% e _A_ttornev Address Phone Accountant Ad&ess Phone Financing Sources (lenders, partners, etc...) Name Add:ess Phone S~.me Ad&ess Phone S.-liile Ad&ess Phone $1tme Ad&ess Phone Parent Company Name Address Phone Others Name Ad&ess Phone g~.me Ad&ess Phone Elk R~ver Econormc Development Authority Miczo Loan Fund Application Page 5 of 7 V. ATTACHMENTS CHECK LIST Please a~acE the follo~ving: ^) Written Business Plan: 1. Description of Busmess 2. Ownership 3. Management 4. Date Established 5. Products/Services 6. Future Plans .B) Financial Statements for Past T~vo Years .C) Financial Projecrions for Two Years .D) Resume of Owner/Management E) Personal Financial Statements of Propzietor, Partners, Guarantors .F) Letter of Commitment from Applicant Pledging to Complete Dunng the Proposed Project Dura=on G) Letter of Commitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project H) Other I) Other Fee (1% o£ amount o£1oan request) Elk River Econormc Development .%uthonry Micro Loa-~ Fund App!icazion Page 6 of 7, VI. AGREEMENT I / We cem~y ~at ~1 reformation provided in ~s appEcadon is ~e and co~ect ~o ~e best to check c~e~t references and ~e:~ ~ci~ and o~er inflows:on. I / We ~ee to provide any ad~don~ m/o~:on as may be requested by ~e Ci~ and ~e Finance Co~xee. DATE APPLICANT BY BY Elk Kiver Economic Development Authority IVficro Lo~a Fund A?plica~on P.~ge 7 0£7 City of l ver Business Subsidies Policy- Adopted: Economic Development Authority Housing & Redevelopment Authority City Cour~cLi. Amended: Economic Development Authority November 12, 2002' November 25, 2002 November 25, 2002 December 9, 2002 City of Elk River 13065 Orono Park,way ]Elk River, 1VIIW 55330 (763) 441-7420 CITY OF ELK RIVER POLICY AND PROCEDURES RELATING THE USE OF BUSINESS SUBSIDIES TO I. PURPOSE ]or the pu~oses of this document, the term "City" ~hall ira'&de ?he Elk River City Council, E~vnomic Deve/opment ,.4uthority, and J-Jousing and Redevelopment :4uthorz'ty. The purpose of fins policy is to establish guideines and criteria regarding the use of business subsidies, such as tax increment financing (TIF), tax abatement, and other business subsidies for pfvate development projects within the City of Elk River and shall be m addition to the requirements and Limitations set forth by provisions of Minnesota State Statute 116J.993 (MN Business Subsidy Law), and by the City's policy and guidelines of the particular form of subsidy. These-guidelines shah be used in processing and reviewing applications requesting business subsidies 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 fight 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 critefa does not guarantee the fward of business subsidies. 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 Ndsdictions. I!. DEFINITION OF "BUSINESS SUBSIDY" The following tTpes of assistance having a value in exces~s of $25,000 are deemed 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 commercially available; · Reductions or deferrals of taxes or fees; below those · Guarantees of any payment under any loan, lease, or other obligation; and, · Preferential us~ of government facilities. City of Elk River Business Subsidies Policy 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 proiects 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 atrz:acUVe 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 direcdy or indirecdy through "spin ofF' development. · To achieve development on sites ~vkich would not be developed without business subsidies assistance. - · To remove blight and/or encourage development of commercial and indusmal 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 othez~vise preclude private investment. · To create opportunities for the construction, operation and maintenance of affordable housing. IV. GENERAL POLICIES FOR THE USE OF BUSINESS SUBSIDIES Business subsidy assistance will be provided from the City, by 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 ~vill be considered on a case-by-case basis. A developer requesting business subsidy assistance must demonstrate, to the satisfaction of the City, sufficient cash equity investment in the project as required witbS_n the City's policy for the particular form of subsidy. Business subsidy will not be provided in circumstances where land and/or property pr/ce 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. A developer must be able to demonstrate to the City,, or, if appl/cable, to the underxvntmg authority, a marker-demand for a proposed project. Business subsidy will not be used in cases where the subsidy would create an unfair and sigmficant competiUVe financial advantage over other similar projects in the area. Business subsidy will not be used for projects that would place extraordinary demands on city infrastructure and services. City of Elk River Business Subsidies Policy 3 If requested by the CitT, the developer shall provide adequate financial guarantees to ensure completion of the project, including, but not lirmted to: assessment a~eements, letters of credit, cash escrows, and personal guaranties. 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 kistory. If requested by the City, or ks consultants, the developer shall provide sufficient market, financial, environ_mental, or other data relative to the successful operation of the project. Projects receiving business subsidy approval from other affected tarring jurisdictions will be more favorably received by the City. GUIDELINES FOR COMMERCIAL/INDUSTRIAL BUSINESS SUBSIDIES Business subsidies will not be used for on-site 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. The project must be consistent with the City's Comprehensive Plan, Land Use Plan, and Zoning Ordinances. The project must result in the retention of e>dsting 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. 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 to meet the job and wage goals established by the City. The minimum wage for a job to be considered a new or retained job shall be $15.00 per hour exclusive of benefits. Deviations less than the wage floor will be considered on a case-by-case basis and in accordance with the requirements of the NEN Business Subsidy Law. Business subsidies will not be used for commercml/industrial projects that have a history of inconsistent compliance with applicable environmental rules and regulations. City of Elk River Business Subsidies Policy 4 VI. SUBSIDY AGREEMENT AND REPORTING REQUIREMENTS Each company receiving a business subsidy shall be subject to the subsidy a~eement and reporting provisions and reqUarements set forth by the MN Business Subsidy La~v and summarized below: A. Pro~ess 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 fozTnat drafted by the State of Minnesota and shall be filed ~vith the City no later than March 1 of each year for the progress made the previous year. B. Maintain Facility The recipient agrees to maintain and operate its facil/ty at the site.where the subsidy is used for a period of five years after the date the subsidy is provided. Failure to Comply Businesses failing to comply with the subsidy a~'eement will be subject to f'mes, repayment requirements, and be deemed ineligible by the State to receive any loans or grants from public entities for a period of five years. VII. A. SUBSIDY APPLICATION PROCESS AND PROCEDURE Application for business subsiclies shall be made on forms for the particular form of assistance provided by the Cit7 of Elk River Director of Economic Development, or desigmee. A fee of $ 5,000.00 shall accompany any Tax Increment Finance, Tax Abatement, or grant request application to cover the City's initial legal, adrrdmstrative, and planning costs. Micro-Loan applications shall include a fee in the amount of 1% of the loan request_ed. Following a review by appropriate City, Staff the application shall be referred to the either the Economic Development Author/ty, or Housing and Redevelopment Authority, for recommendation to the City Council for further action. 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 prelLmmary 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. City of Elk River Business Subsidies PoLicy 5 City of Ell< River Micro Loan Proposed Amendments to the Policy & Application Issues DiscuSsed at Finance Committee Meeting (I 0-7-02) and Staff Issues for Discussion: Finance Committee Recommendations from 2-18-03 meeting are highlighted in bold & itab'cs. Interest Rate (Page 2 & 3): The Finance Committee proposed establishing an interest rate floor for all programs at 2%. Committee consensus on interest rate _rToor 0£2% on all prog~ams.' e Job & Wage Goals (Page 2 & 7): Staff recommends the Committee consider revising the loan amount-to-job ratio and wage rate for the two industrial loan programs. Staff recormr~ends the Committee consider using the State economic development finance loan amount-to-job ratio, as follows: $ 6,000 per job paying $9-12.00 per hour, exclusive of benefits $10,000 per job paying over $12.00 per hour, exclusive of benefits Note: Loans less than $75,000 do not require compliance with the statutory Business Subsidy Law for job and wage goals. However, the Finance Committee discussed that perhaps the minimum criteria still be apphed for loans amounts less than $75,000. Loan amounts over $75,000 must meet the City's Business Subsidy Policy. Committee consensus to keep loan amount-to-fob rado the same at $20, O00/job. Recommended remow2ng- "average" wage language. Amend Supplemental program to require n'z/nimum wage o£$9.00 per hour. Indus=iai Incentive program minimum wage to rema/n at $10. OO per hour. What penalty is applied if job/wage goals are not met? Should be consistent with Business Subsidy Po~cy requirements. Should the 5-year location requirement be included as well? Requires call of loan anyway. 3. Term (Page 2 & 3): Staff recommends including language specifying the following: Real estate uses: Machinery & Equipment uses: Maxmaum amort52ation of 20 years Maximum amortization of 10 years Staff recommends that the maturity date remain fixed upon refinancing. Committee consensus to include sta£f recommendations stated above. Micro Loan Policy Amendment Issues Updated from Feb. 18, 2003 cormmttee Meeting Page 2 of 3 4. Equity (Page 2 & 3): Staff recommends including language specifying the following: At least 50% of the total project cost must be privately financed through owner equity and other lending sources. Committee suggested using SBAS04 loan requirements _For language. Consensus was that at least 10% o£the project r~. ust be ~om the owner's eqoJ~ and that at least of the project be privately F~anced through owner equity and other len~g sources. See SBA ~o~aHon attached as prodded by committee member McNMr. 5. Refinancing (Page 2 & 3): Staff questions for discussion: Should refinancing be allowed just to take advantage of lower rates? No Should a market rate be continued or stated as prime plusx ? MarIk-et Rate What criteria should be considered for refinancing/extensions, same application form? Written request and current Fznancial statements should be submitted for consideration. Staff recommends a processing fee be applied to cover legal and filing expenses. Typically staff is seeing these expenses range from I[500 - $1,000 total. $ 500 up~ontprocessing fee should be required on retTnancing requests. Staff recommends that the Finance Committee review all refinancing applications. Yes Staff recommends adding language that allows the EDA to require automatic payment be structured with the applicant's lender. Yes Discussion on remaining issues tabled until the next Committee meeting, Eligible Uses (Page 4): The EDA Board directed the Finance Cormxaittee to review and provide recommendation if "investment property development" be considered an eligible use of the Micro Loan. See page 4 of EDA 1-13-03 meeting minutes attached. Issue: If Micro Loan was used for building improvement/development but the business relocates or business is sold to different owner, should the loan be called due? Should all loans agreements be in the name of the business applicant to avoid such issues? e Industrial Incentive Program (Page 2): The Finance Committee discussed opening this program up to city-wide locations rather than targeting the West Business Park areas. See attached industrial business park sites and a copy of the Committee discussion notes from 6-20-99 and 8-21-97. Micro Loan Policy Amendment Issues Updated from Feb. 18, 2003 Committee Meeting Page 3 of 3 ge e Program Objectives (Page 7): Staff reco~rwnends adding the following program objecUVe: "The project results m new job creation m the City of Elk River." Compliance with the Business Subsidy State Statute (Page 7 & 8): Staff recommends the section be revised to include the following language: "Each company receiving a loan amount in excess of $75,000 from the EDA Micro Loan Fund shall be subject to the provisions and requirements set forth by the City of Elk River Business Subsidy Policy and Minnesota State Statute 116J.993." staff would follow the statement to include a summau~ of general requirements from the City policy. EDA Finance Committee Meeting Minutes Tuesday, March 4, 2003, 5:00 PM Ell( River City Hall Present: Jerry Atherton, President, Lake Assault Custom Boats Patrick Pelstring, President, Pelstnng Capital Corporation Committee Members/Staff x Cliff Lundberg x Chris Carlson x Paul Motto Micro Loan Portfolio Report x Jim Simpson Jeff Gongoll __~x Catherine Mehelich-Staff Dan Tveite x Tom McNair x Heidi Hall-Staff Catherine Mehelich presented a surmaaary of the Micro Loan balance sheet. Ms. Mehelich stated that Carpe ICairos (Custom Cutter Grinding) and Sportech have recently paid their balances in full. Ms. Mehelich also stated that Riverside Manufacturing has verbally requested a loan extension but has not provided staff with the requested information to process the request. Due to staff's repeated attempts to obtain the information, and due to consistent delinquencies, the Finance Com_m.ittee directed staff to consult with the City's attorney regarding the issue. Presentation by Jerry Atherton of Lake Assault Custom Boats Staff provided the Finance Cormmttee with the following information prior to the meeting. Issue Staff has received a request by Jen¥ Athe:ton, President of Lake Assault Custom Boats for a Supplemental Micro Loan in the amount of $50,000 to be used for equipment purchase. The loan is proposed to be structured as a participation loan with M & I Bank of Coon Kapids. Background Lake Assault Custom Boats is a start-up manufacturer of custom fishing boats. The company has identified a very targeted market of elite fishermen. The company has identified 7,500 square feet of lease space in the Decker building for its manufacturing operation. The company owner, Jerry Atherton, has extensive experience in the sheet-metal industry. The applicant proposes to use the micro loan funds to purchase equipment necessary to imtiate production and sales of the boats. The company has financing commitments for equity investment and a bank ]me of credit. In addition, the company has submitted an application for financing from the Initiative Foundation. The sources and uses of the project are as follows: Bank Line of Credit $100,000 Working Capital Private Equity $ 80,000 Working Capital Initiative Foundation $ 75,000 Working Capital EDA Loan $ 50,000 Equipment EDA Finance Committee Meeting March 4, 2003 Page 2 of 3 Total Project $305,000 The applicant has proposed that the EDA take a first position on the equipment. The preliminary equipment list is attached. The applicant proposes to create 7 to 12 full-time jobs within the first t~vo-years of the project. Proposed wages are not less than $17.00 per hOUlZ Mr. Atherton presented the following infon~ation to the Finance Committee: · Boat Design Concepts · Customer Experience · Market Niche · Existing Marketing Materials · Similar Boat Designs · Operational Milestones · Equipment Shortlist · Owner Background Pat Pelstrmg provided background information on the project's financial sources and future commitments. Finance Committee Discussion The Finance Committee asked Mr. Atherton several questions regarding boat design, employees, suppliers and marketing. Most of the discussion reflected marketing issues. The Finance Committee expressed that Mr. Atherton should consider additional marketing efforts that may ultimately increase his estimated $10,000 marketing budget. Finance Committee Recommendation Jim Simpson moved to recommend to the EDA to approve the $50,000 Supplemental Financing Loan to Lake Assault Custom Boats subject to the following items: · Personal guarantee from Mr. and Mrs. Atherton · Confn-mation that additional financing is in place · The l°an is to be secured by a l't lien position on the' machinery and equipment. The loan is proposed to be structured as a par6cipafion loan with M & I Bank. Tom McNaiz seconded the motion. The motion carried 5-0. Paul Motin departed at this time. Continue Discussions on Proposed Amendments to the l¥1icro Loan Policy The Finance Committee continued theiz discussion from the February 18, 2003 Finance Committee meeting regarding the proposed amendments to the Micro Loan Policy. The Finance Committee suggested the following amendments to the respective sections of the Micro Loan Policy: · Eligible Uses: Investment property development should be an eligible use of the Micro Loan with the requirement that speculative projects are 50% pre-leased and that relocation of the business would require review by the Finance Committee. EDA Finance Cormmttee Meeting March 4, 2003 Page 3 of 3 · Industrial Incentive Program: Continue to target only the West Business Park for this program in conjunction ~vith the City Strategic Economic Development Plan. · Program Objectives: Add "The project results m new quality job creation/retention m the City of Elk River" as an objective. · Compliance with the Business Subsidy State Statute: Include "Each company receiving a loan amount m excess of $75,000 from the lEDA Micro Loan Fund shah be subject to the provisions and requirements set forth by the City of Elk River Business Subsidy Policy and Minnesota State Statute 116J.993." as new verbiage m this section. City of River The La'~,ht Industrial Hub of the Northwest Metro Economic Development I~licro Loan Fund Policy & Guidelines And Application Revised: April 2003 September 1999 Cit3, of Elk Kiver Economic Development Aurhor/t3, 13065 Orono Parkway, P.O. Box 490 Elk Kiver, M2q 55330 (763) 441-7420 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND POLICY & GUIDELINES Revised April 2003 PURPOSE The Economic Development Authority for the City of Elk River (EDA) reco~m'fizes the need to stimulate private sector investment into manufacturing facilities and equipment in order to create new jobs, boost producmdty and retain e,,dstmg 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 xfability of Elk River's central business district. Subsequendy, 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 central business district to rehabilitate their existing buildings. II. LOAN PROGRAMS In order to meet the economic and community development objectives of the EDA, tKree distinct loan programs exist within the Micro Loan Fund to promote business growth in Elk River. Supplemental Financing Program Purpose: The Supplemental Financing Program is desi~o-ned for industfi,-d firms who have maximized their conventional financing and equity resources and subsequently would be unable to complete a project without EDA assistance. Amount: Up to $50,000 of secondary financing (not to exceed 40% of the project cost. Equity: Must have private-sector commitments for 50% of the project cost. Borrower to provide 10% or more of project financing. Rate: Fixed; 1 point below the lowest prime rate published in the Wall Street Journal the da3, the loan is closed, or 2%, whichever is ~o-reater. ZerlTl: Financing with a balloon payment in up to 3-years. Loans may be amortized up to the following limits: 15-years on real estate uses; 1 O-years on eqmpment uses. Extension: In the event that the Borrower is unable to obtain conventional financing to replace the Micro Loan at the end of three years, the loan naa}, be extended up to m~o additional years at a market rate of interest. Elk River Economic Development Authom3, Micro Loan Fund Polic3, & Gmdelmes Page 2 of 8 Criteria: 1. Borrower must create one new full-time job for each $20,000 loaned within m,o years. Said jobs must pay a minimum wage of $9.00 per hour plus benefits. Borrower will also be required to meet certain provisions of the City's Business Subsidy Policy. 2. Borrower must be an industrial finn and comply with the provisions of the city's indusmal and business park zoning 0rdmances. Redevelopment Financing Program Purpose: The Redevelopment Financing Pro,am is available to business and property owners in the central business district (CBD) for the rehabilitation and restoration of their buildings. Amount: Up to $50,000 of secondary financing (not to exceed: 40% of the project cost. Equity: Must have private'sector cormrfinnents for 50% of the project cost. Borrower to proxdde 10% or more of project financing. Rate: Fixed; 2 points below the lowest prime rate published in the Wall Street Journal the day the loan is closed, or 2%, whichever is geater. Wenll: Financing with a balloon payment in up to 3-years. Loans may be amortized up to the following lhrfits: 15-years on real estate uses; 10-years on equipment uses. Extension: In the event that the Borrower is unable to obtaha conventional ffmancing to replace the Micro Loan at the end of three years, the loan ma.5' be extended up to two additional years at a market rate of interest. Criteria: 1. At a minimum, 20% of Micro Loan dollars must be used for the hnprovement of the buildmg's facade. 2. Borrower must be located in the Central Business District (see attached map). Industrial Incentive Program Purpose: The purpose of the Industrial Incenm, e Progam is to encourage industrml development that supports the tax base and brin~ quality jobs to the city. Amount: Up to $100,000 of secondary financing (not to exceed 40% of the project cost. Elk River Econormc Development Authority /Vficro Loan Fund Policy & Guidelines Page 3 of 8 III. Equ/tT: Must have private-sector commitments for 50°,/o of the project cost. Borrower to provide 10% or more of project financing. P,.ate: Fixed; 4 points below the lowest prime rate published in the Wall Street Journal the day the loan is closed, or 2%, whichever is greater. TerlTl: Financing with a balloon payment in up to 5-years. Loans may be amortized up to the following limits: 15-years on real estate uses; 1 O-years on equipment uses. Extension: In the event that the Borrower is unable to obtain conventional financing to replace the Micro Loan ar the end of five years, the loan may be extended up to m~o additional years at a market rate of interest. Criteria: 1. Borrower must be an industrial fi_ma and create one new full-time job for each $20,000 loaned witkin 2 years. Said jobs must pay a minimum wage of $10.00 per hour plus benefits. Loans in excess of $75,000 shall meet the City's Business Subsidy Policy for new job and wage goals, as well as location requirements. 2. Borrower must locate in the West Business Park (see attached map) and comply with the provisions of the city's industrial and business park zoning ordinances. 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 buildh~ f. Exterior renovation of retail, commercial and industrial buildings g. Public infrastructure needed for economic development expansions h. Investment real estate with a minhrmm 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 e.xistmg 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 pro,am, may be eli~ble for an Economic Development Micro Loan as further deemed herein: Elk R/vet Econormc Development Auflaomy Micro Loan Fund Poliq, & Guidelines Page 4 of 8 ¥1. · Business must be a for-profit corporation, partnership, or sole proprietorship. · Business must be a sma//business as defined by the Small Business Admimstradon (SBA). · Business must have a positive net worth. · Reli~ous, polidcal, and pornograpl~ic enterprises are not eligible to use the ]Economic Development Micro Loan Fund. MICRO LOAN FUND TERMS & CONDITIONS 1. Loan Structure All EDA Micro Loans will be structured as flartidjOation 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 sh,nplifies the financing process for all parties involved. A participation agreement will be signed by the borrower, prkmary lender and the EDA. The EDA may require additional agreements to be signed by fl:e borrower (i.e. securi~, a~eement, personal gmarantees, job performance agreement). 2. Simultaneous Micro Loans The simultaneous use of different Micro Loan Fund Programs by any one borrower or for any one project is prokibited. 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 matuhty date of the EDA loan. 4. Late Payment Charge A late payment charge of up to 8% of the installment amount may be enforced. REGULATION FOR NEW CONSTRUCTION AND IMPROVEMENTS All buildings wkich public funds will be used for construction or renovation are to be brought into confomqance with city codes and policies. 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 ener~, related improvements. c. Hook-up to city set,rices (i.e. water, sewer) VII. LOAN SECURITY AND GUARANTEES Applicant must be able to secure the loan by proxdding the EDA with a minimum of a subordinate mortg-age 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 ag'reement. Elk River Economic Development Aufl~ont3, Micro Loan Fund Policy & Guidelines Page 5 of 8 VIII. IX. TIMING OF PROJECT EXPENSES No project should cowmaence until the Elk River Economic Development Author/t7 has approved the loan application. Any costs incurred prior to the approval of the loan application are generally not eli~bte expenditures. No building construction should commence until the required City permits are secured. The apphcant will be responsible .for all legal, recording, and other fees required for protection of a security interest in the loan, payable by a 1% processing fee, which is paid at the time of application. PROCEDURAL GUIDELINES FOR APPLICATION AND APPROVAL 1. All applicants shall first contact a prirnary lending institution to deternxine if additional equi~ is needed, and if so, how much. The applicant and the primary lender shall then meet with City Staff to obtain infon2adon about the Micro Loan pro,am, discuss the project, and obtain applicadon font, s. 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 if applicadon 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. The application will be reviewed by the Cit-), 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. The EDA Finance Corem/tree and EDA Commissioners will review each application in terms of its consistency with the goals of the Growth Management, Strate~c, and Economic Development Plans and in relation to the project's overall impact on the commumty's economy. Redevelopment Loan applications will also be reviewed by an HRA member in conjunction with the lEDA Finance Committee. They will also evaluate the project application in terms of the following: a. Project Design - Evaluation of project desig'n will include review of proposed acti~dties, rime lines and a capaci~ to implement. Elk River Economic Development Authorit3' Micro Loan Fund Pokicy & Guidelines Page 6 of 8 b. Financial Feasibility - Availability of funds, private invoNement, financial packaging and cost effectiveness. Appropriate ratio of private funds to Micro Loan funds. · Sufficient cash flow to cover proposed debt smwice as demonstrated by financial statements and projections. · Business must show a positive net worth. · Letter of Cormnitment from applicant pled~oing to complete the pro)ect during proposed project duration, if the loan applicadon is approved. · Letter of Commitment from other financing sources stating terms andcondidons of their participation in the project if applicable. · Sufficient collateral Co 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. 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 fulfillment of the city's approved and adopted econmrfic 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 e~stmg building code violation. 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 origq_nal 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 ro lower market interest rates. Elk River Econotmc Development Authorit3, Micro Loan Fund Policy & Guidelines Page 7 of 8 The EDA Finance Committee will recommend the approval, denial, or request a resubrmssion. A recormnendation from the Finance Committee will be forwarded to the EDA for final action. Xl. LOAN POLICY REVIEW The above criteria will be rexdewed 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. COHPLIANCE WITH STATE STATUTES Each company receMng 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.I.993 and the City's Business Subsidy Policy summarized below: Progress Reports The borrower shall file a report annually for two years after the dosing of the loan or until all goals set forth in the application have been meet, wKich ever is later. Reports shall be completed ushag the format drafted by the State of Minnesota and shall be filed with the City in March of each year for the prexdous year. Maintain Facility The borrower agrees to maintain and operate its facility at the site where the loan is used for a period of 5-years after the date the loan is closed. Goal Attainment In addidon to attahxing or exceeding the jobs and wages goals set forth in Section IV of the Applicafon, the borrower agrees to achieve at least one of the goals for conununity development set forth in Section IX, part 5, subdivision (e) of the Micro Loan Fund Policy. Redevelopment loans in the central business district are exempt from job creation and wage goals stated in Section IX, part 5, subdivision (e) provided the loan amount does not exceed 50% of the project cost. Failure to Comply Businesses f, iling to comply with the above provisions will be subject to fines, repayment requirements in accordance with the state statute, and be deemed ineli~ble by the State to receive an.5' loans or ~ants from public entities for a period . of 5-years. XIi. RIGHT OF REFUSAL The Elk River Econon'fic Development Authority may deny any project which it deems inappropriate according to the guidelines established in this document. Elk River Econormc Development Authority Micro Loan Fund Policy & Guidelines Page 8 of 8 ELK RIVER ECONOMIC DEVELOPMENT MICRO LOAN FUND APPLICATION I. CONTACT INFORMATION Company: Ad&ess: City- / State / Zip Contact Person(s) Business Phone Fax Home Phone Email Check One: __ Proprietor __Corporation ~ Parmership Social Securit37 No. Federal ID # State ID # Il. NATURE OF LOAN REQUEST Which Micro-Loan Progam are you applying for? __ Supplemental Financing Pro,am __ Redevelopment Financing Program __ Industrial Incentive Pro,am Amount Requested: $. Total Project Cost:. T)~pe of project: __ New construction for a start up business. __ New construction for an e:dstmg business. On site expansion __ Equipment purchase __ Remodeling: (drde o,e) Cmrmaercial / Retail / Industrial Off, er Please ~ve a brief summary of your business and its products or service: Please give a brief smrmaary of the project: Please describe how this loan ~x411 impact your project: III. FINANCING Project Costs Land Site improvements Buildings (attach plans & costs) Equipment/Macl~xery/Fixtures (attach list and estimated costs) Remodeling Indusmal Inventory/Working Capital Other (attach description) Total Costs C OlrllTlents: $ $ $. $ $ Elk R/vet Economic Development Authom7 Micro Loan Fund Applicat/on Page 2 of 7 Proposed Sources of Financing SOURCE NAME Bank Loan Bank Loan Other Private Funds Applicant Contribudon Other Fed Grant/Loan State Grant/Loan EDA Micro Loan Total Financing Comments: TERMS AMOUNT $ $ $ $ $ $ $ $, Collateral Assignments To Bank 1 To Bank 2 To Private Sources To Other Sources To Federal Govt To State To EDA Micro Loan Comments: Description of Collateral Lien Position Elk River Econormc Development Authority Micro Loan Fund Application Page 3 of 7 Value of Collateral Book Value Cos, r Existing Liens Land $ $, $ B dings $ $ Machinery & Equip. $ $ $ Other $ $ $ Other Comments: IV. JOB &WAGE GOALS Present ~ of Employees Total Payroll Jobs To Be Created* Please )v/de the followin: infonmation on jobs you expect to create. Average Are the Jobs Expected Numbe~ Hourly Annual Pemuanent or Hiring Job Tide of Jobs Wage Salary Temporary? Date *If loan is for job retenuon only, please explain m Business Plan. Job Creation Timetable the :~ble below when indixqdual jobs will be added to the firm. Number Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. Qtr. ~ 3 4 5 6 7 8 .lob Tide of Jobs 1 _ Elk River Economic Development Author/t3' Micro Loan Fund Application Page 4 of 7 IV. Name PROJECT CONTACTS Attorney Ad&ess Phone Accountant ~',~ame Ad&ess Phone Financing Sources (lenders, partners, etc...) Name Ad&ess Phone Name Address Phone Name Ad&ess Phone Name Ad&ess Phone Parent Company Name Ad&ess Phone Others Name Ad&ess Phone Name Address Phone Elk River Econormc Development Authority Micro Loan Fm~d Application Page 5 of 7 V. ATTACHHENTS CHECK LIST Please attach the following: A) Writ-ten Business Plan: 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 Proiecdons for Two Years D) Resin'ne of Owner/Management E) Personal Financial Statements of Proprietor, Parmers, Guarantors F) Letter of Commitment from Applicant PledgSng to Complete During r_he Proposed Project Duration G) Letter of Co~mrfitment from the Other Sources of Financing, Stating Terms and Conditions of their Participation in Project H) Other Other j) Fee (1% of amount of loan request) Elk River Economic Development Auflaoriry Micro Loan Fund ApplicaUon Page 6 of 7 VI. AGREEMENT I / We cer~5~, that all mforma6on provided in d~is application is true and correct to the best of my/our 'knowledge. I / We authorize the City of Elk RioTer and the Finance Committee to check credit references and xTer/~7 financial and other reformation. I / We a~ee to provide any additional reformation as may be requested by the City and the Finance Commirtee. DATE APPLICANT NAME BY BY Elk River Econormc Dex~elopment Aufl~or/ry Micro Loan Fm~d Application Page 7 of 7