2018-08-27 EDA Packet - Laserfiche WebLink

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sufficient to pros ed the Oakdale EDA from realizing a substantial loss. Working Capital Proceeds from an Oakdale Seed Fund to should not be used for working capital or to refinance prior obligations of the small business concern. Availability of Personal Resources Since the primary focus of the Oakdale Seed Fund is economic development, personal resources of the owners or principals of the small business concern should not usually disqualify the small business concern from receiving assistance. Where credit factors indicate the need for additional capitalization, the injection of personal resources may be required to make the loan credit-worthy. Personal Guarantees The EDA should require the personal guaranty of any person owning 20% or more of the small business concern regardless of the form of ownership. Participants and Structure of Project Financing Maximum Private Sector E 2Mosure The Oakdale Seed Fund is designed to foster projects contributing to sound economic growth in Oakdale in such a way that maximum private sector exposure is stimulated and encouraged. The Seed Fund should not be a substitute for conventional business financiniz or be used in Dlace of other specialized Sefederal or local needs. In most Seed Fund projects a private sector lender will make a separate secured loan equal to a certain percentage of the total project cost and will usually be secured by a senior lien on project assets acquired with the financing. The EDA's share of the project financing will usually be secured by a junior lien position on project assets. The EDA will use the Seed Fund to participate with the private sector lender in making the total to to the small business concern. Private Sector Lender Financing may be provided by regulated and/or ®r financial institutions or noninstitutional sources if they are in the business of providing financing for commercial purposes and they are not associated with the small business concern receiving 55