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					Micro Enterprise Fund Resource Guide




   Loan information and resources for small business
                start up and expansion

                      October 2005
WISCONSIN DEPARTMENT OF COMMERCE PROGRAMS:

Community Development Block Grant - Economic Development (CDBG-ED)   3

Major Economic Development (MED)                                     6

Dairy 2020 Early Planning Grant Program                               8

Early Planning Grant (EPG)                                            9


WISCONSIN WOMEN’S BUSINESS INITIATIVE CORPORATION

Micro Loan                                                           10


MISSISSIPPI RIVER REGIONAL PLANNING

La Crosse County Revolving Loan Fund                                 11

CMV Growth Development Revolving Loan Fund                           12


SOUTHEASTERN MINNESOTA DEVELOPMENT

Southern Minnesota Microenterprise fund                              13


SOUTHERN MINNESOTA INITIATIVE FOUNDATION

Small Enterprise loan program                                        15

Step up loan program fact sheet                                      17


ECONOMIC DEVELOPMENT AUTHORITY

Houston County Revolving Loan Fund                                   21


CITY OF CALEDONIA

Revolving loan Fund                                                  22




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As the economy becomes more global, the region must look more regional. We can no longer
compete and succeed as individual communities while the rest of the world competes
regionally.

The 7 Rivers Region Alliance goals are to provide:
    a clearinghouse of vital information designed to enhance economic development
    a model for collaboration that facilitates partnerships and provides regional leadership
    a spirit of cooperation that transcends borders for the good of our region

This guide is one more effort on the part of the 7 Rivers Region Alliance to provide a regional
resource that can be used to help small businesses and those entrepreneurs who want to start
one. By working with new entrepreneurs, we look to contribute to the growth of our
economy.

The Micro-Enterprise Fund Resource Guide presents loan programs offered by the government,
counties and municipalities that are available to small businesses. These loan programs are
geared to the small business that is looking for financing alternatives below $10,000.

The Resource Guide provides the following information regarding each micro -loan program:
    Name and source of funds
    Eligibility requirements
    Participation amount
    Requirements
    Financial terms and conditions
    Application process
    Contact information

This information, provided in a simple, easy-to-use manner will help you help your small
business partners and clients. Small businesses now have a tool which will help them gain
access to micro-loan funds across the region.

If you know of a loan or grant program that should be included in this guide or for additional
copies or membership information, please the 7 Rivers Region Alliance Community Liaison at
(608) 787-8777 or 7rivers@uwlax.edu.




                                                                                                 2
Community Development Block Grant - Economic Development (CDBG-ED)
Wisconsin Department of Commerce

ELIGIBILITY

All businesses that are, or will be operating in Wisconsin are invited to participate in this
program provided they are:

      Located in cities whose population does not exceed 50,000
      Not located in Milwaukee County; or
      Not located in certain Waukesha or Dane County communities.


ACTIVITIES

             Construction and expansion
             Working capital
             Acquisition of existing businesses
             Land
             Buildings
             Equipment

PARTICIPATION

Usually $3,000 to $10,000 per full time job created. But other factors such as viability of the
project, number and nature of the jobs created, project's economic impact upon the
community, collateral position available.

REQUIREMENTS

At least 50% of the total eligible project costs must be funded through private resources, at
least 51% of the jobs created or retained must be filled or made available to persons of low
and moderate income, the total amount of the CDBG-ED assistance that can be provided to
any business may not exceed $1 million.

FINANCIAL TERMS AND CONDITIONS

Interests are around 4%. Terms are working capital-5 to 7 years, equipment-5 to 10 years, real
estate-12 year term amortized over 20 years.

REPAYMENT

Monthly payments of the principal and interest.




                                                                                                  3
APPLICATION PROCESS

      Interested applicants must first talk with the local Area Development Manager (ADM).
       The ADM will visit the site and discuss the project with the applicant, provide a copy of
       the application manual and identify other programs that could potentially assist the
       applicant.
      The ADM will submit the preliminary project information to the Department for review
       by a Finance Specialist.
      The Finance Specialist will underwrite the project and make a funding recommendation
       to the Secretary's Office. The Secretary's Office will either: Deny the proposal, in which
       case the applicant will receive a letter outlining the reasons for denial, or, make a
       positive funding recommendation, in which case the applicant will receive a
       preliminary commitment letter fully detailing the terms and conditions of the
       Department's proposed participation.
      If a positive recommendation is made, the final step is for the community to submit a
       CDBG-ED application for approval.

INFORMATION REQUIRED

Businesses should have the following information available when they meet with the local
ADM:

      Background information on the company.
      A description of the project.
      A detailed project budget.
      Information on employment levels, wages and benefits, both existing and projected (3
       years).
      A project timeline.
      Balance sheet, profit and loss, and cash flow statements for the last three fiscal years
       and the most recent interim statement.
      Three years of financial projections with notes covering all significant assumptions. For
       the first year, provide monthly balance sheets, profit and loss, and cash flow
       statements. For the second and third years, provide fiscal year-end balance sheets,
       profit and loss and cash flow statements.
      Personal Financial Statements for principals with ownership of 20% or greater.
       Statements should be signed and include Social Security numbers, date of birth, phone
       numbers and home addresses.

Note: All financial statements should be prepared in accordance with Generally Accepted
Accounting Principles (GAAP).




                                                                                                4
CONTACT INFORMATION

For La Crosse, Monroe, Buffalo, Trempealeau and Jackson County please contact:
 Marty Ambros 715/836-2630mambros@commerce.state.wi.us

For Juneau County please contact:
Deb Clements 715/344-1381 dclements@commerce.state.wi.us

For Vernon County please contact:
William Winter 608/647-4613 bwinter@commerce.state.wi.us




                                                                                 5
Major Economic Development (MED)
Wisconsin Department of Commerce

ELIGIBILITY

To be eligible for consideration under the MED program, the project must, involve significant
capital investment relative to the state of Wisconsin as a whole, or involve the retention or
creation of a significant number of jobs in the political subdivision where the project is
located.

ACTIVITIES

Construction and expansion, working capital, acquisition of existing businesses, land,
buildings, and equipment, refinancing is not an eligible activity.

PARTICIPATION

Commerce's level of participation in MED projects ranges between $3,000 and $10,000 per ful l
time job created. The actual amount of participation is dependent upon factors such as: the
viability of the project, the number and nature of the jobs created, the project's economic
impact upon the community, the collateral position available, and the amount of private
funds leveraged.

REQUIREMENTS

Applicants are typically required to provide at least 50% of the total eligible project costs
from sources other than the State of Wisconsin.

FINANCIAL TERMS AND CONDITIONS

Interests are around 4%. Terms are Working capital-5 to 7 years, equipment-5 to 10 years,
real estate-12 year term amortized over 20 years.

REPAYMENT

Monthly payments of the principal and interest are required. Personal guarantees are
required.

APPLICATION PROCESS

      Interested applicants must first talk with the local Area Development Manager (ADM).
       The ADM will visit the site and discuss the project with the applicant to gather
       preliminary project information. In addition, the ADM may identify other programs that
       could potentially assist the applicant.
      The ADM will submit the preliminary project information to the Department for review
       by a Finance Specialist.


                                                                                                6
      The Finance Specialist will underwrite the project and make a funding recommendation
       to the Secretary's Office. The Secretary's Office will either deny the proposal, in which
       case the applicant will receive a letter outlining the reasons for denial, or, make a
       positive funding recommendation, in which case the applicant will receive a
       preliminary commitment letter fully detailing the terms and conditions of the
       Department's proposed participation.
      If a positive recommendation is made, the final step is for the project to be presented
       to and approved by the Wisconsin Development Finance (WDF) Board.

INFORMATION REQUIRED

 Businesses should have the following information available when they meet with the local
ADM:

      Background information on the company.
      A description of the project.
      A detailed project budget.
      Both existing and projected (3 years) information on employment levels, wages and
       benefits.
      A project timeline.
      Balance sheet, profit and loss, and cash flow statements for the last three fiscal years
       and the most recent interim statement.
      Three years of financial projections with notes covering all significant assumptions. For
       the first year, provide monthly balance sheets, profit and loss, and cash flow
       statements. For the second and third years, provide fiscal year-end balance sheets,
       profit and loss, and cash flow statements.
      Personal Financial Statements for principals with ownership of 20% or greater.
       Statements should be signed and include Social Security numbers, phone numbers and
       home addresses.

NOTE: All financial statements should be prepared in accordance with Generally Accepted
Accounting Principles (GAAP).

CONTACT INFORMATION

For La Crosse, Monroe, Buffalo, Trempealeau and Jackson County please contact:
Marty Ambros 715/836-2630mambros@commerce.state.wi.us

For Juneau County please contact:
Deb Clements 715/344-1381 dclements@commerce.state.wi.us

For Vernon County please contact:
William Winter 608/647-4613 bwinter@commerce.state.wi.us




                                                                                               7
Dairy 2020 Early Planning Grant Program
Wisconsin Department of Commerce

ELIGIBILITY

Existing and start-up Wisconsin dairy producers.

ACTIVITIES

Proceeds from an award may be used only to cover the cost of having an independent third
party provide the professional services necessary to assist the applicant in the start-up,
modernization, or expansion of a Wisconsin dairy farm.

PARTICIPATION

Although Commerce can provide 75% of eligible project costs up to a maximum of $3,000, the
actual amount of funds awarded is based upon factors such as the viability of the project, the
project's economic impact, and fund availability.

FINANCIAL CONDITIONS

Applicants are required to contribute at least 25% of the total project costs from sources
other than the State of Wisconsin.

APPLICATION PROCESS

      Interested applicants must first talk with the Director of the Dairy 2020 Program, who
       will discuss the project with the applicant, provide a copy of the application manual
       and identify other programs that could potentially assist the applicant.
      The Applicant will complete the application manual and submit it to the Department
       for review.
      The project will be underwritten and a funding recommendation will be made by an
       Internal Review Committee. The project will either be denied, in which case the
       applicant will receive a letter outlining the reasons for denial, or, approved, in which
       case, the applicant will receive notification of the award.

CONTACT INFORMATION

For La Crosse, Monroe, Buffalo, Trempealeau and Jackson County please contact:
Marty Ambros 715/836-2630mambros@commerce.state.wi.us

For Juneau County please contact:
Deb Clements 715/344-1381 dclements@commerce.state.wi.us

For Vernon County please contact:
William Winter 608/647-4613 bwinter@commerce.state.wi.us


                                                                                                  8
Early Planning Grant (EPG)
Wisconsin Department of Commerce

ELIGIBILITY

Eligible applicants include Wisconsin individuals, for-profit businesses, cooperatives, and
childcare centers that have fewer than 50 employees whose business will be in one of the
following Industrial Clusters:
     Automation
     Agriculture/Food Products
     Biotechnology
     Information Technology
     Manufacturing
     Medical Devices
     Paper/Forest Products
     Printing
     Tourism
     Childcare (does not include in-home childcare)

PARTICIPATION

Limited to the professional services necessary to obtain a comprehensive business plan from a
qualified, independent third party that is acceptable to Commerce. The maximum funding
available for Early Planning Grants is 75% of Eligible Project Costs up to $3,000. There is
typically more demand for EPG funds than there are funds available. As a result, the
application process is competitive and not all projects can be funded.

FINANCIAL CONDITIONS

Applicants will be required to provide a cash match of at least 25% of Eligible Project Costs.

APPLICATION PROCESS

The EPG application process involves completing the application manual and submitting it to
Commerce for review by a Business Finance Specialist. The Business Finance Specialist will
underwrite the project and make a funding recommendation. The applicant will receive a
decision in approximately 15 business days from Commerce's receipt of a complete
application.

If the grant is approved, the applicant will enter into a contract w ith Commerce that details
the terms and conditions of the award. The Business Plan must be completed and all funds
must be disbursed within one year of the award date.

CONTACT INFORMATION

1-800-HELP BUS (1-800-435-7287)


                                                                                                 9
Micro Loan
Wisconsin Women’s Business Initiative Corporation

ELIGIBILITY

Offers to businesses owned by women, minorities, and low -income individuals.

ACTIVITIES

Loans can be used for expenses associated with starting or expanding a business, including
machinery, equipment, furniture and fixtures, inventory, supplies and working capital.

PARICIPATION

WWBIC can lend up to $35,000.

FINANCIAL TERMS AND CONDITIONS

    The interest rate is 8.00% - 13.50%. Rates in some geographic locations may be lower.
    Terms are from 12 months to 6 years.
    A non-refundable $50 charge to conduct a preliminary review.
    A $200 contribution to cover the costs of providing services to the borrower. If the
application is denied, $100 will be refunded.

APPLICATION PROCESS

Fill in and send the application form.

CONTACT INFORMATION

Madison Office
South Central Region Office
2300 S. Park Street
Madison, WI 53713
Phone: (608) 257-5450
FAX: (608) 257-5454
Web site: http://www.wwbic.com/
E-mail:info@wwbic.com




                                                                                             10
La Crosse County Revolving Loan Fund

ELIGIBILITY

Participating lender: money from this loan fund is always in conjunction with a sponsoring
senior lender or other investment capital. To apply for a RLF loan a business must also secure
private financing. The sponsoring senior lender will also be invited to appear at the County
Loan Board meeting to answer questions concerning the loan and the servicing of the County
RLF loan if it is approved.

ACTIVITIES

Real estate, working capital, and equipment all are eligible financing uses. Adequate
collateral and security requirements will be sought on all RLF loans. The RLF may take a
subordinated position behind a senior lender.

PARTICIPATION

Loan size in the $7,000 to $85,000 range. Micro loan in the $300-6,999 range are also eligible.

REQUIREMENTS

Job creation: a minimum of one job created per $10,000 of RLF financing
Loan ratio: $2 of private financing to every $1 of RLF financing.

TERMS AND CONDITIONS

      Refinancing of existing debt: by businesses will be considered if the business can
       satisfactorily demonstrate such refinancing is necessary to stay in operation and/or loss
       of jobs is a likely consequence if more favorable financing terms are not secured.
      Equity: borrower shall provide minimum equity of 10% of total project cost
      Terms: 10 to 15 years on land and buildings; expected life for equipment and
       machinery
      Interest rate: based on need. Rates may be as low as 4% below prime rate as quoted in
       the Wall Street Journal at time of closing. The minimum rate will be 4%.
      Relocation: Business cannot relocate out of La Crosse County during term of loan
      Deferred payments: the initial loan principal payments, if needed, may be deferred up
       to two years. Interest only payments are required during the deferred period.
      Fees: A $200.00 processing fee shall be paid with the submission of each RLF
       application. An additional fee of $400.00 shall be paid at the time of closing to cover
       additional administrative expenses and future reporting and monitoring costs
       associated with the loan. For micro loans below $7,000 there is a $30.00 application
       fee with an additional 5% of the total loan (not to exceed $350.00) if the loan goes to
       closing. Each of these two fees shall be made payable to the MRRPC.




                                                                                              11
APPLICATION PROCESS

Business seeking county RLF must first apply to their municipality’s RLF (if applicable). Prior
to completing a loan application, contact the Mississippi River Regional Planning Commission
(MRRPC) at (608) 785-9396 to see about the amount of loan funds available. The MRRPC is the
RLF loan administration and review agent.

CONTACT INFORMATION

Mississippi River Regional Planning Commission
1707 Main Street, Suite 240
La Crosse, WI 56401
Telephone (608) 785-9396

La Crosse Area Development Corporation
712 Main Street
La Crosse, WI 54601
Telephone (608) 784-5488




                                                                                             12
CMV Growth Development Revolving Loan Fund

ELIGIBILITY

Participating Lender: money from this loan fund is always in conjunction with a sponsoring
senior lender. To apply for a RLF loan a business must also secure private financing. The
sponsoring senior lender will also be required to appear at the Loan Board meeting with the
business to answer questions and will service the RLF loan if it is approved.

ACTIVITIES

Real estate, working capital, and equipment are all eligible financing uses. Adequate
collateral and security requirements will be sought on all RLF loans. The RLF may take a
subordinated position behind a senior lender.

PARTICIPATION

Loan sizes in the $7,000-85,000 range are preferred. The maximum loan to a single borrower
is $100,000. Micro loans below $7,000 may also be considered.

REQUIREMENTS

Job Creation: a minimum of one job created or retained for every $12,000 of RLF financing.
The Loan Board may adjust this up to one job for every $20,000 if they feel the economic
benefits of a proposed loan merit such an adjustment.
Loan Ratio: for purpose and protection of the RLF loan portfolio, $2 of private financing to
every $1 of RLF financing is required.
Equity – each project will require a minimum of 10% equity.

TERMS AND CONDITIONS

      Working Capital: the total dollar amount of RLF loans for working capital may not
       exceed 75% of the total RLF capital.
      Refinancing of existing debt may be considered if a business can satisfactorily
       demonstrate such refinancing is necessary to stay in operation and loss of jobs is a
       likely consequence if more favorable financing terms are not secured.
      Loan Terms: land and buildings 10-15 years, equipment and machinery expected life,
       balloon payments and a transition to private financing after an agreed upon timetable
       are likely to be part of a loan.
      Interest Rates: interest rates will be based upon need. Interest rates may be as low as
       4% below prime rate as quoted in the Wall Street Journal at time of closing. The
       minimum rate will be 4%.
      Deferred Payments: deferment of initial loan payment may be allowed.
      Fee: A $100.00 processing fee shall be paid with the submission of each RLF
       application. An additional fee of $200.00 shall be paid at the time of closing to cover
       additional administrative expenses and future reporting and monitoring costs


                                                                                               13
      associated with the loan. For micro loans there is a $30.00 application fee with an
      additional 5% of the total loan (not to exceed $350.00) if the loan goes to closing. Each
      of these two fees shall be made payable to the Mississippi River Regional Planning
      Commission.


APPLICATION PROCESS

 Prior to completing a loan application, contact the Mississippi River Regional Planning
Commission (MRRPC) at 608-785-9396 to see about the amount of loan funds available. The
MRRPC is the RLF loan administrator and review agent.


CONTACT INFORMATION:

Mississippi River Regional Planning Commission
1707 Main Street, Suite 240
La Crosse, WI 56401
Telephone (608) 785-9396
Email: plan@mrrpc.com




                                                                                             14
Southern Minnesota Microenterprise fund

ELIGIBILITY

Microenterprise Fund (MEF) Microloans are designed for start-up, newly established, or
growing business. Funds will be made available to qualifying entrepreneurs based on
established loan fund procedures.

ACTIVITIES

Small business loans are to be used for: seed capital, working capital, purchases of inventory
and equipment, real estate, building renovation and expansion capital.

REQUIREMENTS

Business must be located in one of the eight founding member communities, able to
demonstrate a need for financing through a realistic business plan and unable to obtain
financing from a traditional lender. Projected sufficient income to repay interest and
principal within a timely period.

PARTICIPATION

Maximum loan $35,000

COLLATERAL

Value of all collateral will be determined as well as the quality and secondary markets that
exist. Collateral can consist of real estate, accounts receivable, equipment and other tangible
and intangible assets of value.

INTEREST RATE

The fund policy regarding loan interest rates is established by using the prime rate published
in the Wall Street Journal. Consideration regarding the size and risk of the loan will be
influential in setting the interest rate.

FEES: Loan origination fee, plus cost of searches, credit reports, filling and legal.




                                                                                             15
CONTACT INFORMATION

Mark Thein or Joe Hoffman
Southeastern MN Development Corporation
P.O Box 684
Rushford, MN 55971
Phone: 507-864-7557 Fax: 507-864-2091,
mthein@acegroup.cc, hoffmanj@acegroup.cc
Web Site: www.semdc.com




                                           16
Small Enterprise loan program
Southern Minnesota Initiative Foundation

ELIGIBILITY

Small loans are available for start up or expansion of businesses engaged in: Manufacturing,
Service, Retail, and Child Care/Elder Care.

REQUIREMENTS

      Demonstrates a need for financing through a realistic business plan.
      Projects sufficient income to repay the loan within an appropriate time frame.
      Demonstrates good character and a strong commitment to a business plan.
      Demonstrates an inability to obtain financing from a traditional lender.
      Businesses located in 20-county service area.

ACTIVITIES

Business owners may use loan funds on the following: Inventory, Supplies,
Machinery/Equipment, and Working Capital.

TERMS AND FEES

Loan Size: Up to $35,000. Interest Rate: Determined on a case-by-case basis and typically
based on market rates Length of Loan: Maximum loan term is six years Collateral:

      Loans are fully secured, but may be subordinate to the security interest of a bank as
       primary lender
      Personal guarantees are required with business entity

Fees: Loan recipients pay at the time of closing a $50-$100 processing fee plus actual cost of
searches, credit reports, filings and legal fees incurred by the foundation

ASSISTANCE

 In addition to financing through the Small-Enterprise Loan Program, the foundation supports
technical training, which facilitates business success. Technical assistance may sometimes be
a requirement to receive a small enterprise loan. Specific types of assistance include: start-up
business, consulting, one-on-one counseling, business plans, marketing plans and strategic
planning, referral to other small business organizations, educational seminars and workshops
on small business topics.




                                                                                               17
APPLICATION PROCESS

Applicants are encouraged to call the foundation’s Business Success Program staff as early as
possible in the business planning process. Applicants are requested to complete and submit
the following:

      Small-Enterprise Loan Application
      Current business plan
      Cash flow projections for 24 months
      Personal financial statement(s)
      Two years of personal income tax returns
      Two years of business financial statements (existing businesses)
      Two years of business income tax returns (existing businesses)

CONTACT INFORMATION

Tom Shea, E-mail: toms@smifoundation.org
Marcia Haley, E-mail: marciah@smifoundation.org
Phone: 507.455.3215
website at www.smifoundation.org




                                                                                            18
Step Up Loan Program
Southern Minnesota Initiative Foundation

ELIGIBILITY

Childcare providers may apply for a loan if they are:

      Located in The Foundation’s 20-county area
      A licensed family childcare provider or childcare center caring for children
      A start-up provider who will become licensed as a result of participation in the loan
       program
      The owner of the home providing childcare

ACTIVITIES

Business owners may use loan funds on the following:

      Start-up or expansion costs
      Working capital
      Code requirements
      Program relocations
      Repairs, renovations or upgrades
      Furniture and equipment
      Educational toys and materials
      Playground equipment

PARTICIPATION

Loan size in the $500 - $200,000 range.

TERMS AND CONDITIONS

      Interest Rate: Determined on a case-by-case basis and typically based on market rates
      Length of Loan: Maximum loan term is six years. Larger loans may be amortized over a
       longer period.
      Collateral is generally required
      Personal guarantees may be required
      Fees: Loan recipients pay at the time of closing a $50-$100 processing fee on loans less
       than $35,000 or one percent origination fee on loans greater than $35,000 plus actual
       costs of searches, credit reports, filings, and legal fees incurred by The Foundation.




                                                                                               19
APPLICATION PROCESS

Applicants are encouraged to call The Foundation’s Business Success Program staff as early as
possible in the business planning process. Once The Foundation staff determines the
feasibility of the loan, applicants are requested to complete a Step-Up Childcare Loan
Application and submit the following with the application.

      Current business plan
      Cash flow projections for 12 months
      Personal financial statement
      Two years business financial statements (existing childcares)

CONTACT INFORMATION

Diane Lewis, E-mail: dianel@smifoundation.org
Phone 507.455.3215
www.smifoundation.org




                                                                                            20
Houston County Revolving Loan Fund
Economic Development Authority

ELIGIBILITY:

Existing and new businesses

ACTIVITIES:

Real estate, working capital, and equipment all are eligible financing uses.

PARTICIPATION:

15% for economic development projects, 25% for redevelopment projects.

TERMS AND CONDITION:

Owner equity must equal public financing. Maximum Length of term financed is based on
useful life:
    Acquisition of land, building and new construction: 20 years
    Machinery and equipment: 7 years
    Building renovation: 15 years
    Working capital: 1-5 years

APPLICATION PROCESS:

      Preliminary project discussions: with EDA staff, City, Funding sources…
      EDA finance committee review of pre-application, Subcommittee review of suitability
      EDA pre-application review: EDA finance committee provides comments and/or
       recommendation to EDA. EDA makes recommendation to County Board.
      Houston County Board preliminary action: review of EDA recommendation(s) and action
       whether to proceed with application, public hearing(s) as required and preparation of
       necessary documents.
      Full application review: by staff and EDA finance committee. Applicant deposit is
       required.
      Business subsidy / Assistance approval process: County board hold s public hearings as
       required, and if project is approved, authorizes final document preparation and
       closing.
      Closing: signing of documents and project start authorized with permits.

CONTACT INFORMATION:

Joyce Iverson, EDA-Development Coordinator
507-725-3450 at Caledonia City Hall
507-864-7557 at the Southeastern Minnesota Development Corporation



                                                                                           21
Revolving Loan Fund
City of Caledonia

ELIGIBILITY:

Any legitimate business whose primary place of business is in the city of Caledonia. Applicant
must have the authority to incur debt and carry out the proposed project purpose.

ACTIVITIES:

Real estate, working capital, and equipment all are eligible financing uses.

PARTICIPATION:

15% for economic development projects, 25% for redevelopment projects.

TERMS AND CONDITION:

Personal guarantees will be required in all projects and may be collateralized with personal
assets where appropriate.
Owner equity must equal public financing. Maximum Length of term financed is based on
useful life:
    Acquisition of land, building and new construction: 20 years
    Machinery and equipment: 7 years
    Building renovation: 15 years
    Working capital: 1-5 years

Following funding of a project, periodic financial reporting and participation in a
recordkeeping program or technical management assistance may be required. If payments are
delinquent, borrowers may be required to attend an EDA meeting to discuss possible
solutions.

COLLATERAL:

Each subsidy will be secured by collateral adequate to safeguard the lender. If the EDA is the
sole lender, it will take at first security interest in the assets financed. If the EDA is in
partnership with another lending source, the EDA will take a subordinate interest in the assets
being financed.

APPLICATION PROCESS:

Preliminary consultation with development office staff then:
    Complete business subsidy application
    Release authorization signed
    Letter of agreement as required
    Minimum fee deposit for processing costs.


                                                                                             22
After a pre-application is reviewed, the applicant may be invited to submit a full application
including a business plan and financial information. The applicant may also be asked to attend
an EDA meeting to discuss the business plan and assistance requested.

CONTACT INFORMATION:

Joyce Iverson, EDA-Development Coordinator
507-725-3450 at Caledonia City Hall




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Description: Balloon Business Start Up document sample