| |
|
| Loan Amount |
$50,000 to $250,000, (50% of the project must be bank or other financing) |
| Use of Funds |
Operating capital
Fixed assets, land, and buildings
Construction or leasehold improvements
Acquisition, renovation, or installation of machinery and equipment
Limited refinancing when necessary to consolidate debt |
| Term of Loan |
Construction and real estate: repayment term may not exceed 10 years (amortized up to 15 years). Machinery and equipment: repayment term may not exceed 5 years (amortized up to 7 years) |
| Rate of Interest |
Negotiated |
| Down Payment (Equity) |
Variable; some owner equity commitment necessary |
| Typical Structure |
50% maximum from Initiative Foundation and 50% from bank or other sources. Most projects selected have at least 70% bank or other financing |
| How Long Does it Take |
30-60 days |
| Collateral |
Negotiated; collateral positions may be subordinate
to other lenders |
| Personal Guarantees |
Required of principal owner(s) |
| Eligible Projects |
Loans for land, buildings, equipment and working capital to support start-up businesses or business expansions located in or relocating to central Minnesota. Targeted industries include manufacturing and value-added agriculture |
| Ineligible Projects |
Refinancing existing debt, alcohol-related businesses, pornography, speculative ventures or gambling operations, conventional agriculture, absorbing risk or losses from weak or poorly managed companies |
| Job Creation Criteria |
Creation or retention of at least one job per $25,000 financed, creation or retention of living wage jobs with broad employee benefits |
| Incentives |
“Gap” financing |
| Fees |
1% origination fee, one-half of which is considered a non-
refundable loan application fee. The borrower is also responsible for any legal fees associated with documenting and closing the loan |
