The purpose of the City of Watkins’ Revolving Loan Program is to initiate, facilitate, and promote the economic and industrial development interest of the City of Watkins, thereby creating additional Low and Moderate Income (LMI) jobs in the community.
The Watkins Revolving Loan Program has been established as one way of locally addressing economic and industrial development in the city.
Loans under this program are intended to benefit all citizens of the City of Watkins by meeting one or more of the following requirements: – Promoting the Creation or retention of jobs – Creating or retaining a stable economic base – Increasing the tax base of the City of Watkins The Watkins Revolving Loan Program is intended to be a permanent revolving fund where money is available for new loans on a continuing basis as loans are repaid.
Loans will serve as funds to assist existing business or industry or help in the development of new business ventures.
LOAN GUIDELINES 1. The Watkins Economic Development Authority will review and study all revolving loan application requests submitted to the city.
The Authority will then report their findings to the Watkins City Council.
The Watkins City Council shall make the final determination on all loan requests.
2. Loans shall range from a minimum of $2,500 to a maximum of $50,000. Loan requests above $30,000 must demonstrate an ability to meet or provide a great and genuine community need.
The normal terms of a negotiated loan are for a period of five (5) to ten (10) years.
The use of the loan shall determine the term.
3. The interest rate shall be at a rate of 2.5% below the current prime interest rate or a 3% minimum interest rate.
The loan repayment schedule shall be determined on an individual loan basis.
4. The enterprise receiving a Watkins Revolving Loan shall create a minimum of one permanent full time equivalent job for each $10,000 of loan funds or create $20,000 in tax assessments (during the period of the loan) for each $10,000 of loan funds.
Loans $25,000 and over shall be required to enter into a Business Subsidy Agreement with the city as per Minnesota Statutes, Section 116J.
995. 5. If a particular project does not involve the creation of jobs, but is nonetheless found to be worthy of support and subsidy, it may be approved without any specific job or wage goals, as may be permitted by applicable law.
6. Private funds in the project should include the developer’s equity equal to at least ten percent (10%) of the entire project coSt. 7. The City of Watkins shall take a security interest position in all equipment, accounts receivable, real estate, or inventory financed by the Revolving Loan Program.
The City shall also require the personal guarantees of the applicant.
8. The City of Watkins may contract with a bank or private consultant for the administration and serving of the Revolving Loan Program 9. Cost of legal fees and filing fees will be covered by the applicant.
ELIGIBILITY 1. Any existing or new business or industry located or locating within the corporate city limits of the City of Watkins shall be eligible for the Watkins Revolving Loan Program.
2. Activities eligible for loan program funds include: a.
Fixed machinery and equipment b.
Building purchase, construction, and renovation c.
Leasehold improvements d.
Land acquisition e.
Plant modernization f.
Inventory 3. Ineligible activities include: a.
Agricultural production b.
Past completed projects c.
Refinancing of other privately loans or mortgages LOAN APPLICATIONS Loan applications are available at City Hall.
City of Watkins
Address: 111 Central Ave S