[R.O. 2010 §630.010; Ord. No. 1020 §1, 4-20-2009; Ord. No. 1131 §1, 10-16-2012; Ord. No. 1243, 6-23-2017]
The intent of this Chapter is to set forth the eligibility guidelines and procedure of the City of Owensville to administer a revolving loan program known as the Missouri Development Action Grant (MODAG). The program is designed to be administered at the local level in an effort to encourage business entrepreneurship and the creation of new jobs. At no time shall this program be used to refinance or consolidate existing debt or such is inconsistent with the designated in Chapter 620 of the Missouri Revised Statutes.
Eligibility. The Owensville Board of Aldermen, consistent with Sections 620.1350 to Section 620.1360, RSMo., inclusive, and Section 100.255(9), RSMo., may administer these funds upon a successful business application and recommendations from the MODAG Loan Review Committee. The MODAG Loan Review Committee shall be appointed by the Mayor with approval from the Board of Aldermen.
Such application must include, but not be limited to, the following information, which shall be factors to be considered by the MODAG Loan Review Committee and approved by the Board of Aldermen in granting said request:
The purpose of the loan shall be to establish or expand a business within the City of Owensville. Consequently, the activity and location of the business must be within the City of Owensville and comply with all other existing City ordinances.
The business must agree to create or retain jobs, over and above the business owner(s). (fifty-one percent (51%) or more of jobs will benefit low to moderate income persons.)
The per job cost attributable to the program may not exceed fifteen thousand dollars ($15, 000.00) per job. After six (6) months, applicant will show a payroll account of employees, and yearly thereafter.
The private to MODAG funds ratio may not be less than 2.5 to 1 unless otherwise determined by the Board of Aldermen. The MODAG loan can be no lower than second in terms of lien priority.
The applicant must present a But-For causation statement. ("But-For" the program funds, the business cannot commit to this project/activity.)
MODAG funds must be used in the least amount needed to gain any private commitment of funds necessary.
The applicant must pay a two hundred fifty dollar ($250.00) non-refundable loan processing fee plus all attorney and recording fees established by the MODAG Loan Review Committee.
MODAG payments will be due on the date outlined in the promissory note. Payment will become delinquent after fifteen (15) days from the date outlined in the promissory note and a ten percent (10%) penalty will be charged on payments received after the required due date.
Loans over sixty (60) days delinquent will be deemed in default and are subject to immediate termination of any agreement for MODAG funds. At that time, all outstanding balances will be required to be paid.
The loan cannot be transferred if the business is sold. The loan period will be a maximum of eighty-four (84) months and may be closed at any time with payment of balance and interest. Interest rate will be prime plus one-half percent (1/2%. The Board of Aldermen will review rates at any time deemed necessary.
Applicant must provide a complete financial report.
Applicant must provide three (3) years of tax returns.
Applicant must provide a credit report using creditreport.com.
Applicant must sign a personal guarantee and security agreement.
All criteria above must be met or loan is callable.
Security. The MODAG Loan Review Committee shall determine the sufficiency of any and all securities pledged as collateral for loans made under this Chapter. Certain personal property may be considered as collateral only when Real Estate is not available or not sufficient to secure the loan. Retail inventory and account receivables shall not be considered in determining collateral. Equipment to be purchased with proceeds from the MODAG loan must have a serial number and a copy of the paid receipt must be submitted to the designated City office.
The application for MODAG funds shall be reviewed and discussed by the MODAG Loan Review Committee. Final review and consideration of Committee recommendation will be made by the Board of Aldermen. Both the Loan Review Committee and the Board may request any additional information and documentation which may be helpful in processing the request or to determine an applicant's eligibility for the program. The Board of Aldermen may approve or deny an application by a simple motion at any time. All decisions of the Board of Aldermen shall be final decisions.