Economic Development LB840 Loan Request Process

Transcription

1 Economic Development LB840 Loan Request Process Application Requirements: 1. Applicants shall complete an application that may be obtained from the City of Kimball office of Economic Development, at 223 S. Chestnut, Kimball. 2. Applicants shall accompany their application with a signed letter requesting funding. Additionally, this letter shall outline: the merits of the project; the source of conventional financing secured; or a statement from a conventional lender on why the project is not eligible for conventional financing. 3. Applicant shall submit a completed and signed application together with all the information requested to the same office. The application shall then be reviewed by the Economic Development Director and forwarded to the Economic Development Committee for review. The Loan Committee component will make a decision regarding the project. Applicants may be asked to provide other information or attend the meeting. 4. The Economic Development Director will notify any applicant of the decision of the committee. Activities Eligible for Assistance 1. Businesses shall: create jobs at above regional average pay scale; retain existing jobs; or provide expansion/retention funds; or contribute to the sales tax base; or contribute to the property tax base; or provide essential products/services; or possess other merits not previously defined. 2. Loans for community infrastructure; or public works improvements to business benefactors; and/or purchase of fixed assets, i.e. real estate and real estate options that are essential to the location or expansion of a qualifying business. Equity investments may or may not have specific performance requirements such as job creation and shall be secured by Mortgage, Deed of Trust, Promissory Note, personal and/or corporate guarantees or other financial instruments as requested by the loan fund committee. 3. A qualifying business must be located within the zoning jurisdiction of the City of Kimball unless the City Council grants a variance for special circumstances. 4. Attraction of relocating businesses that add to the labor pool; or increase total city valuation; or increase the existing sales tax base; are named target industries; or are matched to the features of the community; or provide a synergetic cluster to existing businesses. 5. The term shall not exceed ten (10) years for loans used for capital assets and five (5) years for loans involving any other asset category. Security for loans will include, but will not be limited to, Promissory Notes, Mortgages or Deeds of Trust, and personal and/or corporate guarantees as appropriate and may be in a subordinate position to the primary lender(s). 6. The interest rate shall be fixed and negotiated on an individual basis, usually onehalf the rate for the project at a traditional banking source. Rates shall not be less than onehalf of prime rate as established by Chase Manhattan Bank of New York on the date of loan approval, nor less than four percent (4%) per annum. Contact the Director of Economic Development at with any questions. Version: 1509 Page 1

2 Loan Terms and Conditions 1. The term shall not exceed ten (10) years for loans used for capital assets and five (5) years for loans involving any other asset category. 2. The interest rate shall be fixed and negotiated on an individual basis, usually onehalf the rate for the project at a traditional banking source. Rates shall not be less than onehalf of prime rate as established by Chase Manhattan Bank of New York on the date of loan approval, nor less than four percent (4%) per annum. 3. The amount of funds available for any single project shall not exceed the amount of funds available under the "Program" during the project term, nor shall it provide for more than fifty percent (50%) of applicant's total project costs. 4. Microloan candidates and emergency assistance candidates will be limited to loans under $20,000 (or in accordance with guidelines set by the Economic Development Loan Committee) and the Economic Development Loan Committee may waive the 10% equity clause for good cause. 5. At the discretion of the Loan Committee, personal guarantees may be required to all LLC and Corporation loans. Processing Timeframe After application is complete and received by the City's Economic Development Dept., the following steps and associated timeframes occur these times are estimated. 1. Application Review Application is reviewed by the Director of Economic Development for completeness and conforming to guidelines approximately 2 3 business days. 2. 'Short Committee' Review Application is reviewed by a 'Short Committee' to verify all information, especially financial data is included so that the full Economic Development Committee has enough information to make a decision approximately 5 or 10 business days. (Application packet is send to each of the Short Committee members and a meeting is scheduled to review application) 3. Question & Answer Period should the 'Short Committee' have any questions these questions will be relayed to the Director of Economic Development and then relayed to the applicant time frame to complete this depends upon responsiveness of applicant. 4. Economic Development Committee meeting established All Economic Development Committee members are polled to establish a date and time to meet approximately 2 3 business days are needed to get consensus from committee for a date. NOTE: A quorum of the Economic Development Loan committee is needed to consider a loan request. 5. Meeting Notice The Economic Development Committee meeting is a public meeting and a notice is required to be printed in the Western Nebraska Observer. Therefore, the notice must be printed in the newspaper prior to the Economic Development Committee meeting anywhere from 3 7 days. NOTE: The Economic Development Committee meeting is a public meeting and all items being discussed (e.g. loan, procedures, etc.) are listed on the agenda. The actual financial data pertaining to loan is not public information and is discussed only in a 'closed session'. The decision to approve or disapprove a loan is voted in the open session 'public meeting'. Version: 1509 Page 2

3 LB840 Application Checklist Information Required: The qualifying business shall provide the following information before the Economic Development Director forwards application on to Economic Development Committee. L::J Completed and signed application (all applicants) L::J Signed letter requesting funds and a brief summary why funds are required L::J A brief description of the business, personal history, employment and/or business references L::J Business plan (all applicants) c:::j Two years completed and signed individual federal tax returns (all applicants) L::J Current and signed year to date profit and loss statement (for 'existing business' applicants) c:::j Recent signed balance sheet (for 'existing business' applicants) CJ Two years completed and signed corporate federal tax returns (for any "S" Corporation or "C" Corporation existing business applicants) c:::j Two years signed and completed partnership federal tax returns (for any partnership existing business applicants) L::J "K1" recent and signed balance sheet (for all partnerships existing business applicants) L::J Complete partnership agreement (new or existing partnership business applicants) c:::j Corporate statement of authority to borrow on behalf of the corporation (all corporate business applicants, new or existing) c:::j Two years projected balance sheets (new business or business expansion applicants) L::J Two years projected profit and loss sheets (new businesses or expansions) D Source and use of funds (all applicants) c:::j Schedule of disbursement (all applicants) L::J Personal financial statement Economic Development Form A (all applicants, every member of any corporation, partnership or limited liability companies) CJ Statement of collateral Economic Development Form F (all applicants) CJ Documentation of ability to provide equity injection c:::j Documentation of any felonious charges pending or felony convictions to any of the associated applicants (if applicable) CJ Letter of intent or denial by conventional lender (if applicable) CJ Other information that may be requested that is particular to the project D Business Plan maybe reviewed by Nebraska Business Development Center (nbdc) Version: 1509 Page 3

4 KIMBALL ECONOMIC DEVELOPMENT LOAN APPLICATION DO NOT LEAVE ANY QUESTIONS BLANK. INCOMPLITT APPLICATIONS MAY BE DELAYED FOR PROCESSING. Business (Borrower) Information: Name of Business: Feder a I ID# City Address: Contact Person: Ti tie: Te I e phone: ( ) Fax No: ( ) Business Type: D Service D Manufacturing D Retail D Tourist Related D Research and Development Business Organization: State Zip Alternate phone {cell or home}: (_) address D Admin/Mgmt HDQS D Warehousing and Distribution D Other: D Proprietorship D Partnership D Corporation D LLC D Other Does the Company have a Parent or Subsidiaries? Yes No If Yes, Please Identify Name: _ Address: Business Type: Startup Buyout _ Existing* *If existing, years in business City _ State Zip Ownership Identification: List all officers, directors, partners, owner, coowners and all stockholders with 20 percent or more of the stock. Name Title Ownership percent Personnel: (FullTimeEquivalent, FTE is based upon 2,080 hours per year.) Existing number of FTE positions: FTE positions to be created within 18 months of application approval Existing number of seasonal* positions: Seasonal positions to be created within 18 months of application approval (i.e. Jobs which will be available for at least 3 continuous months and recur annually) Version: 1509 Page 4

5 Project Information: Proposed Use of Funds Land Acquisition Building Acquisition/Renovation (List all renovations Form B) New Facility Construction (List all details Form C) Acquisition of Machinery/Equipment (List all machinery/equipment Form D) Working Capital (Includes Inventory) (List Working Capital use Form E) Total Project Cost LB840 Funds Requested Other (Specify): TOTAL: Sources of Funds: * *Note: Public sources of financing require the participation of a conventional lender {bank) and/or an injection of equity (nondebt) funds. Amount available by business or owners for investment $ Actual equity injection $ Source of personal injection: (fill in all that are applicable) Loans from friends/family $ Savings $ Cash from bank/credit card $ Home equity $ Whole life cash loan $ Stocks/Bonds $ Sale of real property $ Other $ Participating Lender Information: Name of Lending Institution: Address: Contact Person: Phone ( ) ~ Loan Amount: $ Loan Term: (Years) Interest Rate: _ Percent Variable _Fixed Collateral Required by lender: Equity Required by lender: Equity Information: Project Location: Within the City Limits of Kimball: (yes or no) Version: 1509 Page 5

6 Detailed Building Renovation Describe all renovations to the building, suppliers of material for renovation, and sources of labor that will be utilized and are being paid by the proceeds from this loan. Be as detailed and specific as possible. Summarize renovations: General description of supplies Vendor Name Cost NOTE: Proof of payment for supplies and labor may be required as a condition of this loan. Economic Development Form B Version: 1509 Page 6

7 New Facility Construction Describe the new facility, included architectural drawings, and construction plans, as appropriate. List all suppliers of material, sources of labor etc. that will be utilized and are being paid by the proceeds from this loan. Be as detailed and specific as possible. General description ContractorNendor Name Cost NOTE: Proof of payment for construction including material and supplies, labor, and contractor fees may be required as a condition of this loan. Economic Development Form C Version: 1509 Page 7

8 Detailed Acquisition of Machinery/Equipment List all machinery, equipment, vehicles, etc that are being acquired by the proceeds from this loan. Be as specific as possible (e.g. brand, model#, serial#, etc.) Machinerv, equipment, vehicles, etc. Vendor/Supplier Name Cost NOTE: Proof of payment for machinery, equipment, vehicles, etc. may be required as a condition of this loan. Economic Development Form D Version: 1509 Page 8

9 Detailed List of Working Capital List how proceeds of loan will be used for Working Capital. Working Capital Description Est. Amount Economic Development Form E Version: 1509 Page 9

10 Detailed List of Collateral List all machinery, equipment, vehicles, etc. that will be used as collateral for this loan. Be as specific as possible (e.g. brand, model#, etc.) DO Not list machinery, equipment, vehicles, etc. that are already list on the Detailed Acquisition of Machinery I Equipment Form D. Description of Collateral Est. Value Economic Development Form F Version: 1509 Page 10

11 Disbursement Schedule/Accounts A disbursement schedule may be required by the Economic Development Committee in order to approve the loan request. Should this be the case, the Economic Development Loan Committee and applicant will develop the Disbursement Schedule. This is to insure that the proceeds are used as defined by this application. In some cases a draw down account may be created. The draw down account is a joint account where part or all of the loan proceeds are deposited. The business applicant and the Director of Economic Development are the joint owners of the account. All disbursements from the account must be in the form of a check signed by both the business owner and Director of Economic Development. Version: 1509 Page 11

12 Project Need: Please explain why this project is a good investment by the City of Kimball. If this project is not able to be financed by a conventional lender in whole or in part please state why. If project is not within the City Limits of Kimball, then explain how it will benefit the community. (Attach a separate sheet if necessary) Business Training: Please outline your business or entrepreneur training or experience. If you have participated in the EDGE program, please state when and where you completed the training. (Attach a separate sheet if necessary) Required Attachments: Attach all applicable documentation as listed on the LB840 Application Checklist Page 2. All of the pertinent documents are required before any review can be preformed and an Economic Development Committee meeting can be scheduled. Note: Other 'business specific' information or personal background may be requested. Signatures: I certify that everything I have stated in this application and on any attachments is correct. You may keep this application whether or not it is approved. By signing below I authorize you to check my credit and employment history and to answer questions others may ask you about my credit record with you. I understand that I must update credit information at your request if my financial condition changes. My signature below also gives the City of Kimball permission to share this application, if deemed applicable, with the Nebraska Department of Economic Development for purposes of coventuring my requested financing. Applicant's Signature Date Other Signature (if applicable) Date Economic Develo ment use onl Received by City Economic Development Version: 1509 Page 12

13 Personal Financial Statement Name Social Security#!)ate of Birth Residence Address City, State, Zip Business Name Res. Phone Bus. Phone Assets Cash checking accounts Cash savings accounts Certificates of deposit Securities stocks I bonds I mutal funds See Schedule A Notes & contracts receivable See Schedule B Life insurance (cash surrender value) Personal property See Schedule C Retirement Funds (eg. IRAs, 401k) Real estate See Schedule D Other assets itemize Amount in Dollars Total Assets Liabilities Real estate mortgages see Schedule E Current Debt (credit cards, accounts) see Schedule F Taxes payable Note Payable see Schedule G Other Liabilities itemize $ Amount in Dollars Total Liabilities INetWorth Other Sources of Income Salary, Bonus, Commisions Dividends Real estate Other (alimony, child support, etc) Total Income $ I Amount in Dollars $ Economic Development Form A