City of Gardiner Revolving Loan Fund Guidelines
Disclaimer: this document is intended to provide the reader with a general overview of the City of Gardiner Revolving Loan Fund. It is not intended to create any rights or obligations. The City of Gardiner reserves the right to accept or reject any loan application. For complete rules and terms, please consult the approved loan documents. The City of Gardiner is an equal opportunity lender.
Overview
The purpose of the fund is to provide incentive for:
Commercial and professional service business to locate and/or expand in Gardiner, creating new job opportunities for the un/under-employed.
Downtown property owners to rehabilitate their blighted buildings and make use of vacant space.
Existing business in the downtown area to realize their full market potential and locate in an area better suited (and zoned for) for light industrial use.
We will accomplish this in part by expanding the City of Gardiner's existing revolving loan fund with the USDA Intermediary Relending Program. We plan to maintain the integrity of the existing revolving loan fund by still offering small, high-risk loans of up to $10,000. Loan requests of under $10,000 will be governed under the previously instated guidelines. However, we have come to realize through missed opportunities that situations exist that call for public intervention with larger, lower interest rate loans. The larger loans will have more stringent guidelines attached with regards to collateral and guarantee requirements, as illustrated below.
We will be providing loans to applicants who have demonstrated need and fall within our targeted areas. Our targeted areas are, but not limited to:
The T. W. Dick site on Summer Street, Brunswick Avenue and Highland Avenue.
Water Street buildings
The Gardiner Railroad Station
The Libby Hill Business Park
Our immediate plans for the City's Revolving Fund are to:
Assist T. W. Dick, an industrial steel fabrication company, in moving from the downtown to another facility within town.
Assist private business in redeveloping the T. W. Dick/Summer Street area for commercial use, thus transforming the area to the highest and best use of downtown property.
Renovate and provide handicap access to the blighted upper levels of the Water Street buildings. We will do this to provide incentive for commercial and professional service businesses to locate in downtown.
Provide incentive for business to make use of the vacant renovated and historically significant train station.
Have resources available for any business that has a demonstrated need, will create jobs, and the Economic Development Committee/City Council deems worthy of City support.
Gardiner's plan (specific loan purposes) for relending the loan funds
Create new job opportunities
Retain existing jobs
Decrease building vacancy rates in downtown
Adjust land uses to conform with zoning and highest/best uses
Complete mechanics of how the funds will get from the intermediary to the ultimate recipient
The loan is approved by the City Council upon recommendation from the Economic Development Committee.
The City will inform Gardiner Savings Institution of the decision, the rate and the amount.
Gardiner Savings Bank will prepare all necessary paperwork and legal documents.
Gardiner Savings will then contact the borrower and make arrangements to disperse the funds. Usually the disbursement of the funds will take place by bank check (note: funds are dispersed from bank resources).
After the closing takes place and the funds are dispersed, the bank will contact the City and notify them of the amount. The City will in turn produce a check for the bank.
Eligibility criteria
An applicant for Revolving Loan Fund monies must be a for-profit or non-profit corporation, partnership, or sole proprietorship that has established a financing need that cannot be met through other funding sources. The applicant must certify that they are unable to finance the proposal through other sources at reasonable rates and terms. The applicant can either be a start-up business or existing business located in the City of Gardiner. Loans should be creating or retaining jobs in Gardiner. The fund is intended to participate in large-scale projects, where the city participation is only a small portion of the overall financing plan. To that end, applicants must contribute at least 25% of the project costs from alternate funding sources.
Loan purposes
Revolving loan proceeds can be used towards the purchase of fixed assets (land, buildings, machinery and equipment), inventory, or for funding working capital needs. Funds can also be used for the renovation or rehabilitation of fixed assets.
Fees
None
Rates
The interest rate charged would be negotiable dependent on need, risk, and current market conditions.
Terms
The maximum term will be 15 years.
Collateral requirements
Adequate collateral will be required of all borrowers. This may include a building mortgage, liens on machinery and equipment, and/or personal guarantees.
Limits
$100,000 per loan.
Other Provisions
Loans are non-assumable.
The loan shall be considered in default if the borrower relocates its Gardiner operations outside the city limits of Gardiner. However, the city may choose to negotiate with the borrower and increase in the interest rate as deemed appropriate.
Priorities
Priority will be given to proposals that are:
In accordance with the City's strategic plan for downtown revitalization.
Creating or retaining jobs.
Application process
Completed applications will be reviewed by the Gardiner Economic Development Committee, comprised of eleven area businesspersons and citizens appointed by Gardiner s Mayor with City Council approval.
The Committee will make funding recommendations to the Gardiner City Council, which have final approval authority.
If the Committee rejects the application, an appeal can be made to the Gardiner City Council.
Method of disposition of funds to the ultimate recipient
The loan is approved by the City Council upon recommendation from the Economic Development Committee.
The application will be forwarded to the USDA Rural Development Office to obtain concurrence. The applicant must complete all information required by the attached Rural Development IRP Ultimate Recipient Checklist .
Upon approval from Rural Development, The City will inform Gardiner Savings Institution of the decision, the rate and the amount.
Gardiner Savings Bank will prepare all necessary paperwork and legal documents.
Gardiner Savings will then contact the borrower and make arrangements to disperse the funds. Usually the disbursement of the funds will take place by bank check (note: funds are dispersed from bank resources).
After the closing takes place and the funds are dispersed, the bank will contact the City and notify them of the amount. The City will in turn produce a check for the bank.
Policies Regarding Delinquent Revolving Loan Accounts
Initial Delinquency
The City's agent for management of the Revolving Loan Fund Accounts (Gardiner Savings Institution) will refer delinquent accounts to the Gardiner Economic Development Committee for action when they have exhausted all routine tools for solving the delinquency. The Economic Development Committee will provide a recommendation to the City Council concerning the account:
Pursue collection of the account with legal action by the City Solicitor, who will report to the committee the result of legal action.
The committee does not regard the account as collectible. Do not pursue legal action, but do not release security interest in any collateral, protecting the City's interest should the status of the borrower change in the future.
Removing Accounts from the City's Accounting Records (Writing Off Loans)
The Economic Development Committee will regularly, and no less than annually, review the status of delinquent accounts. When in the opinion of the committee and the City Solicitor there is no likelihood of collecting the debt the committee shall recommend to the Council that the account be removed from the City's accounting records and any existing security interests may or may not be released. The recommendation shall include a rationale for the recommended action (bankruptcy, etc.).
Monitoring of the ultimate recipient s accomplishments
Yearly report detailing:
Employment levels for all companies
Taxable valuation of all companies
Sales figures (if applicable)
Reporting requirements of the ultimate recipient s management
Yearly report detailing:
Staffing levels: how many people working for the company.
Sales figures
Goals, strategies, and anticipated outcomes for the program
Goals:
Decrease in local and regional unemployment
Increase in market value and taxable value of buildings in downtown.
Alleviate slum and blight conditions in downtown
Decrease vacancy rates of buildings in downtown
Transform existing non-conforming land uses into compatible land uses.
Strategies:
Provide financing for unfundable projects that are in accordance with the City's strategic plan. By creating public-private partnerships, we will be initiating projects that otherwise wouldn't happen.
Anticipated Outcomes:
Projects that are in accordance with the City's strategic plan are accomplished.
Business property vacancy rates decrease.
All downtown property values rise on account of the blighted buildings being fixed.
Industrial uses are moved out of the central business district.
High unemployment rate goes down through job retention/creation
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