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Loan Criteria <br />The program is intended to stimulate small business development and expansion, <br />encourage private investment, and promote economic development in the City of <br />Martinsville by making low-interest loans available to small and emerging businesses. <br /> <br />Eligible Applicants, Loan Amounts, Collateral Requirements, and Interest Rates <br />· Businesses located in or relocating to the City of Martinsville. <br /> <br />Start-up businesses and those with less than throe years operating history may <br />qualify for a loan of no mom than $100,000 if (1) sufficient collateral is provided <br />to fully secure the loan, and (2) an amount at least equal to the amount of the loan <br />is provided by the borrower or another lender for the same business purpose as <br />that of the loan. <br /> <br />Established businesses with at least three years Operating history may qualify for <br />(1) a loan of no mom than $100,000 if sufficient collateral is provided to <br />substantially secure the loan, or (2) a loan greater than $100,000 if a 2-to-i ratio <br />of other financing to City funds is provided. <br /> <br />· The interest rate for all loans will be the current prime rate. <br /> <br />The loan evaluation process will be used by the loan review committee to rank <br />loan applications based on the applicant's credit history, business' ability to repay <br />the loan, applicant's management ability and business experience, neighborhood <br />impacts of the business, and fiscal impacts of the loan relating to job creation and <br />retention, leverage of public to private funds, and impact on the City's tax <br />structure in addition to the collateral requirements enumerated above. <br /> <br />Use of Loan Funds, Terms, Guarantees, and City Partnerships with Private Lenders <br />· Loan funds may be used for the following: acquisition of land and buildings, new <br /> construction, facade and building renovation, landscape and property <br /> improvements, purchase machinery and equipment, and working capital. <br /> Refinancing of existing business debt will only be considered as part of a business <br /> expansion. <br /> <br />Loan terms are typically 5 years, but can be up to 7 years for equipment and 10 <br />years for acquisition of land and building construction. <br /> <br />· The loan may be prepaid, in part or whole, at any time without penalty. <br /> <br />All loans shall be guaranteed by the business and personally by the borrowers. In <br />addition, the borrowers shall agree to subordinate all officer debt and defer <br />monthly payments to all officers to the City's loan. <br /> <br /> <br />