Current through Register Vol. 46, No. 19, March 20, 2024
(1)
Evaluation by the department. The department shall evaluate
each application for an Iowa main street loan to ensure that the following
criteria are met:
a. The property for which
the applicant is applying for an Iowa main street loan is situated in the
downtown area of a city participating in the Iowa main street
program.
b. Strong local community
support is evidenced by local contributing effort including, but not limited
to, contributions by the city or county, grants, tax abatement, local private
contributions and investments, and establishment of community development
corporations or community-initiated development groups.
c. The loan proceeds will be used in a manner
that will enhance the property in a manner that will stimulate downtown
economic development within the context of historic preservation.
d. The loan proceeds will be used in a manner
that will enhance the property in a manner that will assist in establishing a
strong public/private partnership to revitalize the downtown area of the
commimity in which the property is situated.
(2)
Evaluation by the
authority. Once approval for the loan is given by the department, the
authority shall evaluate each application for an Iowa main street loan to
ensure that the following criteria are met:
a.
The applicant shall show evidence that it is able to manage the property in a
manner to show economic feasibility. This shall include an overall business
management plan including, but not limited to, the following:
(1) A generalized projection of revenues and
expenditures for the three-year period beginning the month of anticipated loan
closing;
(2) Capital formation
plans, if any;
(3) To the extent
possible, identification and analysis of risk;
(4) Plans for record keeping, personnel and
financial management;
(5) Plans for
marketing the rental of the property;
(6) Appraisal of the property provided by the
applicant.
b. The
applicant shall contribute a minimum of 10 percent of the overall project
cost.
c. There is reasonable
assurance that the loan will be repaid. The authority may require any
collateral, security or mortgage documents or other filings or protection,
including without limitation personal or corporate guarantees, or both, as are
reasonably necessary to insure security.
d. The business's past earnings record and
future prospects shall indicate an ability to repay the loan out of income from
the property. The applicant shall provide financial statements and projections
of future earnings prospects for the business as required by the authority and
shall allow the authority reasonable access to its books and records.
(3)
Amount of
loans. The principal amount of each loan shall not be less than
$50,000 and shall not exceed $250,000.
(4)
Term of loan. Loans
shall be amortized over not more than 30 years; the actual term of the loan
shall be determined by the authority depending on the economic feasibility of
the project.
(5)
Interest
rate. Interest shall be charged on the loan at a rate related to the
community investment program as determined and announced by the authority from
time to time.
(6)
Loan
fee. The applicant shall pay a fee in the amount of I percent of the
initial loan amount. The loan fee shall be payable at closing.