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Economic Development Revolving Loan Guidelines
Sections I through XIV of this document govern the use of Federal economic development revolving loan funds. Section XV of this document applies to the use of State economic development revolving loan funds.
The purpose of these guidelines is to establish policies and procedures to regulate, coordinate and facilitate the workflow for underwriting new financing requests, servicing revolving loans,and ensuring borrower compliance with loan terms and conditions.
II. Authorization and Funding Sources.
Chapter 469 of the Minnesota State Statutes, as amended, authorizes the City of Mankato to make loans to prospective private businesses. The revolving loan fund was capitalized through funds made available by the City of Mankato and the Minnesota Department of Trade and Economic Development.
In addition to these guidelines, loan funds are subject to the rules and regulations established by the U.S. Department of Housing and Urban Development (HUD) for the State of Minnesota’s Community Development Block Grant (CDBG) program.
The mission of the revolving loan fund is to increase the City’s tax base, create and retain permanent private sector jobs and improve economic opportunity and living standards for the citizens of Mankato by promoting local business development and expansion, by attracting out-of-state business expansion, leveraging private sector funds and assisting the development of new technologies.
IV. Program Objective.
The objective of the revolving loan fund is to fill the financing gap between project costs and private debt financing and private equity by making direct low-interest loans for certain approved activities to businesses within the Mankato city limits.
V. Equal Opportunity and Affirmative Action.
VI. Eligible Activities
Certain projects, applicants, activities and costs are eligible for revolving loan funds.
VII. Ineligible Activities.
Certain applicants, projects, activities, and cost are ineligible for revolving loan funds.
VII. Loan Terms and Conditions.
The City shall make available to eligible applicants direct low-interest loans for the purpose of encouraging economic development, downtown development, job creation and
job retention, housing development to meet business needs and preservation of business districts in the City of Mankato.
There shall be a notification procedure for delinquent loans.
If the EDA determines a loan to be in default it will pass a resolution declaring the entity in default and convey the matter to the City Attorney for disposition.
XII. Funding acknowledgement.
For projects financially supported by revolving loan funds the Borrower shall:
XIV. Other Federal and State Requirements.
Revolving loan fund recipients must also comply with all applicable federal and state laws, executive orders and regulations governing:
XV. Guidelines for the regulation of State Economic Development Revolving Loan Funds.