The EEDA Development Corridor Program (DCP) provides a loan and forgivable loan/grant for up to a $75,000 project to qualified and approved applicants to be used for substantial physical improvements to Ely businesses to expand employment and increase tax base. These improvements must provide for the expansion of an existing or new business to provide additional employment. These improvements may include heating, electrical, insulation, exterior, ADA access, and other improvements required to comply with current building codes. These improvements must be necessary to expand the business and provide additional employment.
Forgivable Loan Eligibility
The EEDA DCP was instituted to help Ely businesses improve the quality of their business by adding employment and by completing necessary capital investments.
Eligibility is based on the following:
- The business in question must be in the City of Ely and located in C1, C2, or M zoning district.
- The applicant must be the owner of the business to be expanded
- The applicant must demonstrate the ability to repay the loan and/or must adequately secure the loan
- The applicant cannot be in violation of any City of Ely ordinances.
- The applicant must secure two (2) or more bids on the work being requested unless there is only one (1) viable bidder.
- All borrowers must agree to give the City of Ely a NOTE, a valid mortgage, and a personal guarantee on the property being rehabilitated.
- The business owner must submit a schedule of when the work will be completed.
- The EEDA DCP application will require a $250.00 non-refundable application fee at the time the application is turned in to cover all filing fees, credit report, and minimum title search.
- The applicant must furnish a Personal or Corporate Financial Statement for the past two (2) years
- The Applicants must fill out approval for a credit check report, which is filed with Credit Bureau located in Virginia, Minnesota.
- The applicant must provide a copy of the project budget and indicate any other funding (ex. Bank loan, equity, cash).
Eligible FTE Requirements
The EEDA Development Corridor Program Fund provides the opportunity for a low-interest loan as well as a forgivable loan to qualified and approved applicants.
In order to qualify, the business shall hire at least one (1) full-time employee(s)/Position(s) (2080 work hours per calendar year) at a minimum of $15.00 per hour and maintain said FTE position for a period of two (2) calendar years. The position date of hire shall be no later than six months after the completion of the project and issuance of the certificate of occupancy.
If the two (2) year requirement above is met, the forgivable loan portion of up to $25,000 shall be fully forgiven.
If the applicant is unable to meet the 2-year FTE qualifications established above, the loan shall become due and payable. The applicant shall then be required to make monthly payments for the full loan amount, over a period of 6 years with an interest rate of 2%. Interest shall accrue as of the date of the loan issuance.
Collateral shall be a personal guarantee and / or personal property based on credit worthiness. The program could be combined with other City of Ely, IRRR, and private lender programs as a total package of acceptable risk.
| Project Specifics | EDA Loan | Forgivable Loan/Grant (IRR) |
Private Funding (Equity or Bank Loan) |
|---|---|---|---|
| Project Maximum: $75,000 | $25,000 | $25,000 | $25,000 |
| Project Minimum: $15,000 | $5,000 | $5,000 | $5,000 |
Interest Rate: 2 percent
Maximum Term: 6 years
Payment
Payment will be made directly to the borrower within twenty (20) days of approval by the EEDA Rehabilitation Committee.
NOTE: The determination of these guidelines shall be by Ely Economic Development Authority. Any appeals shall be directed to the EEDA. These guidelines are set up to guide the EEDA in making decisions. These guidelines are not meant to be all-inclusive or to prevent the authority from taking action that it deems necessary. This is a competitive program that will take into account the total investment and the total number of employees added.