May 26, 2015
I hope everyone was able to enjoy the Memorial Day holiday this year. As I mentioned in my last article the City and the EDA are both working on trying to attract new businesses to our community as well as retain and support our existing businesses. I mentioned that the EDA has a revolving loan program and the City and EDA are setting up a tax abatement program.
I wanted to provide some additional details on our revolving loan program. The EDA has a grant that is a 51% / 49% grant match. The Mantorville EDA does not get the money until after we make a loan up to the maximum of what the grant dollars that were allocated. This means that it is in the City's best interest to make these loans so that we can increase the amount of dollars we have available to provide economic growth within our community.
We setup our program to utilize the expertise of lending professionals and then we provide additional funding at a discounted rate after we get an opinion from a lending source. We have worked with the local bank here in Mantorville extensively and they are aware of how our program works. We can work with other institutions as well.
Our standard process (yes we do make custom processes) is that we assume that the applicant applies for business funding from both a bank and the EDA. Both the bank and the city will have a “security interest” in the loan with the bank being the higher priority of the two. The bank will determine the fair market rate for the loan that the business is applying for and the EDA will set our rate around 1.5% to 2% below the banks rate. The EDA loan has a shorter term than that of the bank and also contains a final ballon payment. However, there is not a penalty for early repayment and in fact there are financial incentives for early repayment.
To qualify for these loans a business needs to meet the following criteria:
The effort needs to be a commercial project
The EDA needs to determine that the project is fiscally viable
That the plan fits within our community and the plan for our city
The project will need to meet the Americans with Disabilities Act where appropriate
and
The project / business needs to be located within Mantorville proper.
This is a great program and a couple of our businesses have already taken advantage of this discounted rate. In order to get more information or to start the application process you can pick up a form at city hall or talk to our local bank.
Yours in service,
Chuck Bradford, Mayor - City of Mantorville
MayorBradford.BlogSpot.com
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