Purpose
To provide financial assistance to existing and new businesses.
- Provide capability and incentive for owners to upgrade the appearance, structural condition and operating efficiency of their place of business.
- Assistance and incentive for the development of new industry, retention of existing businesses
- Retention and expansion of job opportunities
Loan Terms and Conditions
A. Maximum loan will be $10,000.00 for projects from $100,000 up to $500,000..
B. Maximum loan will be $20,000.00 for projects $500,000 and over.
C. Repayment of ½ of the loan amount to begin in 30 days of signing.
D. Monthly loan payments will be amortized over 60 months.
E. The remaining ½ of the loan amount including interest will be deferred and forgiven at the end of 10 years providing that:
1. The first ½ of the loan and interest has been paid in full as agreed.
2. All utilities and taxes are current.
3.. The business is still operating within the Commercial or Industrial Zoned limits of the City.
F. If business ceases business within the City of Elgin the loan will be considered in default.
G. If the borrower defaults on any of the terms within the 10 year period, the following will apply:
If default occurs within a 6 year period from the date of the loan, the entire loan amount plus all accumulated interest will be payable immediately.
If default occurs within the year following the 6 year anniversary date of the loan, borrower shall repay to the EDA a sum equal to 80% of the deferred amount plus accumulated interest.
If default occurs within the year following the 7 year anniversary date of the loan, borrower shall repay to the EDA a sum equal to 60 % of the deferred amount plus accumulated interest.
If default occurs within the year following the 8 year anniversary the date of the loan, borrower shall repay to the EDA a sum equal to 40% of the deferred amount plus accumulated interest.
If default occurs with the year following the 9 year anniversary the date of the loan, borrower shall repay to the EDA a sum equal to 20% of the deferred amount plus accumulated interest.
Interest Rate
Interest rate over the life of the loan will be a fixed rate equal to 1% above the New York Prime rate on the day of the loan closing.
Collateral Required
A. Mortgage and/or sufficient collateral to secure loan as determined by the EDA.
B. All filing fees, collateral liens and loan document fees associated with this transaction will be at the borrowers expense.
Eligibility for Loan
A. Property must be located within the Commercial or Industrial zoned limits of the City of Elgin.
B. Applicants/business must be deed holder of property.
C. Applicants’ property must conform to City Zoning Ordinances.
D. Applicant must obtain City building permits required prior to disbursement of funds.
E. Applicants’ property must pass all required health, safety and building inspections.
F. Applicants must authorize EDA to obtain personal and business credit reports and provide any other financial information requested by the EDA.
G. Applicant must be an acceptable credit risk as determined by the EDA.
Eligible Use of Funds
A. Determined by EDA committee on a per loan basis.See Attachment A.
B. Documents must be submitted to the EDA detailing the work to be performed and any other information the EDA deems necessary.
EDA
The EDA is the final decision making authority on the approval or disapproval of loan applications. The EDA reserves the right to treat each loan application on its own merits. The EDA reserves the right to discontinue this program without notice.