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VII. PARTICIPATION AND FUNDING <br /> The RLGP will continue to operate as a public/private sector partnership. <br /> The financial base of the public share of RLGP funds will be interest and principal repayments <br /> resulting from the initial $150,000 of loans. <br /> The fund will continue to provide one-half of each small business loan up to a maximum of <br /> $40,000 at an interest rate of two percent,provided that funds are available. Multiple loans may <br /> be made to businesses,provided that the principal balance does not exceed $40,000 at any time, <br /> and also provided that all payments of principal and interest are current. <br /> Local banks will execute participation agreements with the HRA to carry out their participation <br /> in accord with these guidelines. <br /> VIII. LOAN STRUCTURE <br /> A. The RLGP shall provide a 100% match to private loans up to a maximum amount of <br /> $40,000 RLGP participation. <br /> B. The interest rate of the RLGP loan shall be two percent per annum. <br /> C. The RLGP loan shall be amortized over a 10-year term but shall, at the option of <br /> either the lending institution or the business,be renegotiable at the end of each three- <br /> year period, but no loan including extensions shall exceed 10 years. In no event shall <br /> the interest rate on the RLGP loan change from two percent per annum. <br /> D. RLGP loans in the amount of$8,000 or greater must be fully secured with a perfected <br /> security interest as determined by the lender. <br /> E. The City subordinates its position on the RLGP loan to that of the lending institution. <br /> IX. UNDERWRITING STANDARDS <br /> A. Small and medium sized commercial buildings are defined as those buildings whose <br /> gross square footage does not exceed 30,000 square feet. <br /> B. Businesses receiving RLGP loans shall not have more than 5 or more exact locations, <br /> franchises, or chains. <br /> C. Types of businesses receiving RLGP loans shall be legal permitted or legal <br /> conditional uses within their respective zoning districts. <br /> D. RLGP loans shall be made to fee owners or recorded contract for deed vendees. <br /> X. FINANCIAL GUIDELINES <br /> A. Applicants shall demonstrate a ratio of net operating income (NOI) to debt service of <br /> 1.1:1. NOI= Gross property income less operating expenses and real estate taxes,but <br /> not including mortgage payments, income tax depreciation or non-operating <br /> expenses. <br /> B. Participating financial institutions shall use customary lending practices in <br /> determining eligibility for RLGP loans so as to ensure repayment of principal. <br /> A <br />