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Member Elvig noted in addition to the borrowed funds, Mr. Youngberg is putting his house on <br />the line. He indicated he is supportive of the loan, although he would not likely go higher than <br />the original request of $34,000. <br /> <br />Member Schindel expressed his support of the project. He suggested a co-borrower be required, <br />in addition to a personal guarantee, to ensure that the City's funds are covered in the event that <br />the business is not successful. <br /> <br />Chairperson Riley inquired if this loan request meets the revolving loan guidelines in relation to <br />equity. Economic Development Consultant Mulrooney replied the revolving loan requires 10% <br />equity; the Board could determine whether the home equity loan is considered equity. <br /> <br />Chairperson Riley inquired about the loan being tied to something other than the working capital. <br />Economic Development Consultant Mulrooney advised the loan could be tied to the assets, but <br />secured with other assets if the Board feels that is warranted. <br /> <br />Economic Development Coordinator Sullivan explained the proposed motion would be <br />contingent on a review of the financials. He has discussed this with Mr. Youngberg, and he is <br />willing to wait the week it would take for this review. <br /> <br />Member Elvig indicated he would recommend letters of intent be obtained from potential clients, <br />as well as a letter of commitment from the lending institution. <br /> <br />Member Schindel suggested a copy of the lender's loan package be obtained, which contains a <br />personal finance statement, as well as a personal guarantee. <br /> <br />Motion by Member Elvig, seconded by Member Schindel, to recommend approval of the <br />$34,000 loan to Catheter Technologies from the Revolving Loan Fund, contingent on review of <br />the loan application and financial information, with the following documents required: letters of <br />intent from potential clients, letter of commitment from lending institution, personal financial <br />statements, personal guarantee, UCC filings on assets, and vendor quotes on equipment. <br /> <br />Further discussion: Economic Development Consultant Mulrooney advised as a high risk lender <br />the Board could determine to require the lake property as collateral. Member Kiefer suggested <br />the loan amount be increased to $50,000, and that the loan be secured by the lake property. <br />Chairperson Riley expressed preference in not involving the lake property in the loan, as it gets <br />away from the business aspect of the loan. <br /> <br />A friendly amendment was made by Member Kiefer to include a requirement that the business <br />remain in Ramsey until the loan is paid in full. <br /> <br />Economic Development Consultant Mulrooney indicated this requirement will be included in the <br />commitment letter. <br /> <br />Motion carried. Voting Yes: Chairperson Riley, Members Elvig, Schindel, and Kiefer. Voting <br />No: None. Absent: Members LeTourneau, Steffen, and Strommen. <br /> <br />Economic Development Authority/March 8, 2006 <br />Page 5 of 9 5 <br /> <br /> <br />