A. Application Fee/Preliminary Screening: Prospective loan recipients may submit a loan application for a particular loan project to the Division of Economic Development. ED staff will develop a loan application and preliminary screening process to determine loan criteria eligibility, including insurance and appropriate licensing/zoning requirements. After the preliminary screening process is completed, borrowers continuing to a full application shall be required to pay a nonrefundable application fee. The amount of the application fee is determined by the ED Division and subject to City consolidated fee schedule procedures (preferred as a fixed fee; not subject to annual increase). A current (within 90 days of application) credit report with score will also be checked for each personal guarantor prior to submitting a loan summary to the Loan Committee.
B. Loan Evaluation: If a loan application meets the criteria set forth in the loan application and preliminary screening process, the loan application will be submitted to the Loan Committee for consideration. ED staff will create a loan evaluation matrix to be used by the Loan Committee to approve or deny each loan application. The loan evaluation matrix may include formulas, matrixes or calculators for evaluating credit score, collateral, interest rate and any other quantifiable metric. As soon as reasonably practicable, each voting member of the Loan Committee should submit a loan evaluation score that awards points in specific categories based on the loan evaluation matrix. Upon receipt of loan evaluation matrices from a quorum of Loan Committee members, the ED Division will present the score range or preliminary average to the committee. As a general rule, the committee shall meet or the Chair shall then call for a meeting in which the applicants make a presentation to and answer questions in person from the Loan Committee, which shall then make a final (or updated) evaluation of whether the loan application should be approved or denied upon receipt of at least seven (7) final evaluations of committee members. Scores from the loan evaluation matrix calculations of the committee members will be averaged together after dropping the highest and lowest scores. If the resulting average total score is at or above the threshold level established by the committee, then the loan application at issue shall be approved. A loan application with an average total score that is less than the threshold level shall be denied. Within two (2) business days of approval or denial of a loan by the Loan Committee, the ED Division staff will forward a summary of the loan application and the reasons for approval or denial to the Review Committee (see Review Committee duties herein).
C. Loan Terms: Within the parameters of the loan criteria adopted by the City Council and administrative rules, the Loan Committee shall determine the term, amortization, type of collateral and loan amount to be approved. The Loan Committee may make exceptions to the reduced interest rate calculation plus or minus one and one-half (±1.5) percentage points of the total adjusted rate as long as such stays within the maximum and minimum rates. The Loan Committee can make adjustments to collateral calculations for exceptional circumstances or values up to plus or minus twenty percent (±20%) of the calculation made by using the collateral calculator. Real estate that is used as collateral must have a title insurance policy issued to the City with the expense for such paid by the borrower.
D. Microloans: The ED Division may process and submit loans under twenty five thousand dollars ($25,000.00) ("microloans") to the Loan Committee Chair and Vice Chair for possible evaluation, approval, denial or modification, without necessarily presenting the microloan to the Loan Committee. The Chair and Vice Chair acting unanimously may approve up to ten (10) microloans per fiscal year without Loan Committee action. If the Chair and Vice Chair are unable to act unanimously or if more than ten (10) microloans per year complete the loan application process, such microloans shall be presented to the Loan Committee for evaluation. Regardless, the Chair and Vice Chair acting unanimously may present any microloan to the Loan Committee for evaluation. All other loan criteria and requirements apply to microloans, including loan application, collateral and being subject to Review Committee approval, etc. A microloan applicant or City staff may request a waiver from administratively adopted EDLF loan criteria. Upon receipt of a microloan application with a waiver request, the Loan Committee Chair may submit such waiver request to the Mayor or Mayor's designee for consideration. The waiver request to the Mayor or Mayor's designee shall include a short written statement explaining the specific criteria sought to be waived, and the justification for such waiver. A request for a waiver under this section may not include loan criteria adopted by the City Council.
E. Documentation: All loan documentation shall be administered by ED Division with approval from the City Attorney's Office. All loan documents shall be signed by the Director of CED or designee as allowed by City policy, including limits on real estate and spending or signature authority limits.
F. Loan Finalization: Upon the approval of a loan application, the appropriate staff members from the ED Division will work with the loan applicants to finalize the loan documents and issue the loan.
G. Ongoing Loan Administration: After a loan is issued for a particular loan project, staff members from the ED Division will be responsible for monitoring the status of the loan and for taking any necessary administrative actions in connection with such loan, including waiver of late fees and substitution of comparably valued collateral. Loan Administrator or ED Director may forebear payments or waive late fees up to six (6) months; CED Director up to one year; and the Loan Committee may forebear or waive for more than one year, and makes the determination to write off loans. (2019 Compilation)