(A) The RLF shall exercise flexibility in negotiating terms with the participating financial institutions.
(B) The following conditions, however, are set as minimum guidelines.
(1) All rates and terms for the RLF funds will be based upon a financial analysis conducted under the Community Development Block Grant necessary and appropriate criteria.
(2) The RLF reserves the right to sell their interest in a loan package where the Board deems advisable.
(3) The RLF would accept convertible subordinated debt, with or without deferral provisions for either principal and/or interest.
(4) Liens will be taken covering all assets. A subordinated position will not be accepted where an inordinate amount of risk is evident.
(5) Personal guarantees may be required of owners who control at least 20% of the company.
(6) The RLF will impose the following maximum term requirements and restrictions on loans. Maximum length of terms:
(a) Real estate: 20 years;
(b) Machinery and equipment: ten years, or the usual life of the equipment; and
(c) Inventory/other: Five years.
(7) Rates will be negotiated by the RLF Board, but in no case shall it be less than 5%.
(8) In negotiating terms for potential borrowers, terms will not be made that cannot be feasibly met. A thorough credit analysis will be undertaken prior to negotiating loan terms.
(Res. passed 12-27-1993)