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HomeMy WebLinkAboutExhibitExhibit "A" CITY OF MIAMI Economic Development Loan Fund Program GUIDELINES, FORMS, SCOPE OF WORK, AND ATTACHMENTS Approved by the City of Miami Commission on June 18, 2009 (R-09-0298) Amended by the City of Miami Commission on 2009 (R-09- ) City of M,4rt Deportment of Community Development Last Revision: November 2009 Economic Development Loan Fund ("EDLF") Program Lending Policies and Guidelines The City of Miami has established an Economic Development Loan Fund ("EDLF") Program in accordance with the goals and objectives outlined herein. The EDLF Program, which will be administered by the City of Miami ("City") Department of Community Development ("CD"), will be capitalized using Community Development Block Grant ("CDBG") funds authorized under 24 CFR 570. Purpose The goal of the Economic Development Loan Fun`' ogr to provide businesses with financial assistance to support the retention and creation of jobs w to moderate income City residents. The EDLF Program is designed to fill the financin between private debt financing and private equity. Funds are provided to create economic fit through increased revenues and the creation and the retention of jobs in the City. Eligible Area The EDLF Program is available to bu of the City. Priority will be given to described in the 2009-2014 City of Mi Loans are Evaluated Based on a Pr • Financial viability • P .' ate or retain jobs ated or planning to locate within the boundaries • the Neighborhood Development Zones as an and/or Special Target Areas. • Cact • Capacity om other sources • Potential to in e s d economic development • Ability to repay to • Readiness to proceed 1 Eligible Use of Funds .and Activities Loan funds can be used for the following: Private for -profit entities: • Purchase and Installation of machinery, equipment, furniture, fixtures • Leasehold improvements or expansions • Technology infrastructure • Renovation, rehabilitation and improvement • Inventory Non -Profit entities: • Construction, rehabilitation and improv • Installation of real property and equipment Note: The use of funds for construction activitie ch as renovation, improvement and expansion will trigger a requirement that prevailing w .e paid for all labor (Davis Bacon Wage Rates). Ineligible Use of F Funds cannot be use ,.the • • se of: • Paying off a creditor o a position to sustain a los • Providing funds for distributio applicant. licant who are inadequately secured and are in ayment to the owner, partners, or shareholder of the • Refunding a debt owed to a small business investment company. • Paying of any tax lien or liability. • Refinance loans made by other lenders. • Projects which are not consistent with the City's economic development program. Eligibility Criteria 2 A business may qualify for consideration provided it meets the following criteria: • Business is located or locating within the boundaries of the City of Miami. • Business and/or Principals demonstrate that financing is not otherwise available on terms or conditions that would permit completion and/or successful operation or accomplishment of the project activities to be financed. • Business is an equal opportunity employer. • Business is not relocating jobs, except where the plicant is forced to relocate due to circumstances beyond their control (i.e. gove a tervention, building demolition, etc.). • Project involves no negative environmental impacts. • Project impacts an adequate number of jobs, as defined by 24 C 09 (b)(1)(i), to be created and/or retained for low to moderate income people. • All applicants shall grant Ci residents hiring preference over all applicants for any jobs created as a result of • The business ability to repay the to • Applicant must be willing to comply 1 regulations, guidelines and policies as they relate to the program. Loa • All loan $20,000.00 • At least fifty on low and moderate Job Creation ant to create or retain one, full time, permanent job for every loaned. (51%) of all jobs created or retained must be made available to me persons as defined by HUD under Section 8. • Jobs must be created within six (6) months of the loan closing if loan is not used for rehabilitation or leasehold improvements or the total project does not include rehabilitation or leasehold improvements. 3 • Jobs must be created within eighteen (18) months of the loan closing if loan is used for rehabilitation or leasehold improvements or six (6) month after the completion of the rehabilitation/improvements, whichever is less. Job Retention • The applicant must give details on why the borrowed funds are required to retain the jobs and demonstrate that without the assistas e, the jobs would be lost. Loan Amount Minimum: $20,000.00 Maximum: $80,000.00 • A HUD environmental review must be conducted completed prior to disbursing funds. Note: Higher loan amounts may ..roved in a case by case basis by th` "City of Miami Commission. Loan Terms Repayment term shall be as follows: a) Equipment: Up to the ecorilife of the assets involved, not to exceed the IRS depreciation limits (See IRS Instruc for Form 4562) and not longer than seven Fully amortized be n three (3) to seven (7) years s: Longer repayments may be considered on a case by case basis The interest rat Bathe City o ami's EDLF loans shall be 0% - 3% per annum, based on the cash flow of the b Match Requiremez All loans must be matched by the applicant' s funds. Matching participation requirements will be: Capital: Applicant must match a minimum of 20% of capital needed for project. Equity: Applicant must have at least 20% equity in business. Special Target Areas 4 Special Target Areas as defined in the City of Miami Consolidated Plan or approved by the City of Miami Commission for this loan program may have different from the ones detailed above. Application Fee There will be a non-refundable application fee of $100.00. This application fee must accompany the loan application package. The application fee will be cashed when the package is accepted for underwriting. Program Requirements: • Applicants and their spouses shall sib invited Guaranties, even if the spouse is not part of the Company requesting the • Commercial Insurance Policies naming the acceptable to the City of Miami Risk Dep with mandatory 30 days written notices in cases o • Unless otherwise Miami Co or equipmen • Loans for equipm ami as loss payee in an amount All policies shall provide the City cellation or material change. oved by the Housing and Lo will require a collateral posit ty for the loan. 'ttee and/or the City of of any and all real property • Once the loan is closed,Gent ma &wedge, transfer, hypothecate, encumbrance or dispose of any asset purch in whole •r in part, with funds from the City of Miami, without the written approval; e City of Miami. • The City of Miami may impose late fees if the business does not pay on a timely manner. • If a business does not meet its minimum employment requirements, then the City shall call the loan payable within 30 days. Non -recommended Loans Loans will generally not be recommended for approval for the following reasons: • If the requested funds are otherwise available on reasonable terms: a) From the disposal at a fair price of assets not required by the applicant in the conduct of its business or not reasonably necessary to its potential growth, 5 b) Through the use of personal credit and/or resources of the owner, partners, management, or principal stockholders of the applicant, c) From other Government agencies which provide credit specifically for the applicants' type of business, or d) From other known sources of credit; • For unsatisfactory credit history during the last twelve (12) months. • If a bankruptcy was discharged during the last twenty fo r (24) months. • If the loan will provide funds for speculation in d of property, real or personal, tangible or intangible; • If the applicant is a charitable - institution or nen profit e e, except fer cooperatives which carry on a business acuity fer the-purpese of ob cuniary benefit for their members in the operations of their otherwise eligible small busk oncern; • If the applicant is a new a•er, book publishing company, ma aj e, or similar enterprise; • If any of the gross income of from gambling activities, except their gross income from income o tickets under a state license; or any of its principal owners) is derived Lnls which obtain less than one third of the sale of official state lottery • If the purpose of the loan is to provide a. . s to an enterprise primarily engaged in the "ding or investments or to an . erwise eligible enterprise for the purpose tments not related or essen to the enterprise. • Ifis to finance the acquisition of real property or land. • If the A:. t and/or i rincipals are indebted to the City of Miami. • If the Applic= . • s principals have been debarred from doing business with federal, state, co . • cal governments. • If the proceeds of the loan will be used for moving an eligible business when the move is solely for the purposes of obtaining the benefits of borrowing from the EDLF. Appeal Process 6 Applicants will have 10 business days from the receipt of the letter not recommending the loan to appeal the decision. The applicant can provide additional documents at that time for consideration of the underwriting committee. If the loan is not recommended a second time, there will be no further appeal entertained from the applicant. 7 Loan Approval All loans made strictly under the policies of the EDLF program will be recommended for approval by the Housing and Commercial Loan Committee. If the Housing and Loan Committee denies a loan application, the applicant will be advised in writing with an explanation as to why the loan was denied. All loans not meeting the EDLF program guidelines will require an additional approval by the City Commission. 8