[Ord. No. 976, 9/20/2022]
1. Applicants for a microloan do not need to be residents of Huntingdon
Borough, but the businesses must be located within Huntingdon Borough
or agree to locate within the Borough prior to the disbursement of
the loan. Special consideration will be given to Huntingdon Borough
residents and/or to small retail businesses interested in locating
in the Central Business Zoning District. In addition, the applicant
must, in the Loan Commission's opinion, be able to meet the following
conditions to be eligible to receive funding:
A. An applicant must completely and truthfully fill out the entire application
form provided by the Loan Commission and pay the microloan application
fee at the time of submission. The microloan application fee shall
be set from time to time by resolution of Borough Council. Incomplete
applications or applications that were not provided with the applicable
fee shall be immediately rejected.
B. An applicant may not apply for a loan if the applicant, or the applicant's
spouse, has received more than the current maximum allowable loan
amount as set by Borough Council during the twenty-four-month period
prior to the date of the loan application.
C. No applicant may apply for a loan if the applicant has more than
30 employees.
D. No portion of the loan proceeds may be used to fund or subsidize
any part or portion of the applicant's business which is located
outside of Huntingdon Borough.
E. The applicant may not be delinquent or in default on any existing
private or publicly financed loan and will be required to sign an
affidavit to that effect.
F. The applicant and its principals and owners must be current in payment
of all applicable state and local taxes, including unemployment compensation,
sewer and water accounts and local taxes.
G. The applicant, its principals and owners must not have been convicted
of a misdemeanor or felony or convicted of crimes involving deception,
misrepresentation or fraud.
H. The applicant, its principals and owners must not currently be involved
in any civil proceeding which, in the opinion of the Loan Commission,
could result in a monetary judgment against the aforementioned and
jeopardize the loan or the business.
[Ord. No. 976, 9/20/2022]
1. The following constitute business activities which are eligible for
a microloan.
A. Land costs associated with the purchase, renovation, or new construction
of a building. Land costs may include acquisition, site preparation
and testing, utilities, site mapping, legal, and other related costs.
B. Building costs, including building acquisition; construction; rehabilitation;
and engineering, architectural, legal, and other related costs.
C. Machinery and equipment, including acquisition, delivery, and installation
limited to items directly related to the operation of the business.
D. Working capital for significant expansion only (i.e., for new sales
growth) primarily limited to inventory; new personnel costs; and training
costs.
E. Funding can be used for training, technical assistance, or other
support services to increase the capacity of the recipient.
[Ord. No. 976, 9/20/2022]
1. Ineligible activities include, but are not limited to, the following:
A. Refinancing existing debts.
B. Investor or developer projects or real estate speculation.
C. Related party transactions, i.e., costs associated with a transaction
where the buyer and the seller are one and the same or are related
to each other by blood, marriage, or law. This exclusion does not
apply to cost of labor if labor is supplied by such relative.
D. Labor costs incurred by the eligible applicant or related party.
E. Supplanting Private Sector Investment Capital. Loans may be made
which encourage private investment by reducing financing risk to such
private sector lenders.
[Ord. No. 976, 9/20/2022]
The maximum loan amount for any microloan shall be set by resolution
from time to time by Borough Council. The Loan Commission shall have
the absolute discretion to determine the amount of the loan provided
to each applicant, as long as said loan amount is less than the maximum
loan amount set by Borough Council. All amounts are subject to the
availability of loan funds.
[Ord. No. 976, 9/20/2022]
The Loan Commission has the right to require that any loans
be secured at the highest position available on one or more of the
following assets: land, buildings, machinery, equipment, accounts
receivable, and inventory. In addition, every loan will require a
corporate/owner guarantee and require personal guarantees of principals
and spouses which shall include a confession of judgment.
[Ord. No. 976, 9/20/2022]
Loans used for real estate will have a repayment period of up
to 10 years. Loans used for machinery and equipment will have a repayment
period of up to five years. Loans used for working capital will have
a repayment period of up to three years. In projects where two or
more uses of microloan funds are planned, loan terms may be blended
at the discretion of the Loan Commission.
[Ord. No. 976, 9/20/2022]
Loans will carry an annual fixed rate of 2%.
[Ord. No. 976, 9/20/2022]
The Loan Commission may charge reasonable and customary fees
for processing loans as approved by resolution from time to time by
Borough Council.
[Ord. No. 976, 9/20/2022]
1. Failure to Pay. If a borrower falls two payments in arrears, a penalty
charge will be assessed by the Loan Commission at the rate of 1.25%
per month on the overdue payment. In addition, if the borrower falls
three payments in arrears, the Loan Commission shall charge an administrative
fee as determined by resolution from time to time by Borough Council.
If the borrower fails to bring the loan payments and pay any administrative
fees within four months, the remaining principal and interest shall
be accelerated, and judgment will be confessed against the borrower
in accordance with the loan documents.
2. Failure to Meet Terms and Conditions. The Loan Commission shall increase
in the interest rate to 2% above the current prime on the outstanding
principal for the remainder of the loan if the borrower fails to meet
any of the terms or conditions of the loan. If it is determined by
the Loan Commission that the application contained material misrepresentations,
or funds were used for ineligible activities, the loan will be considered
in default and subject to immediate recall. In addition, the loan
recipient may be referred to the appropriate authorities for criminal
investigation.
[Ord. No. 976, 9/20/2022]
1. Duty to Notify. Each loan recipient shall update, every 12 months,
the information given to the Borough and area loan organization in
the application if conditions change or to the extent that the information
given originally becomes inaccurate or misleading. If a loan is approved
and it is subsequently determined that the application contained material
misrepresentations, or funds were used for ineligible activities,
the loan will be considered in default and subject to immediate recall.
In addition, the project may be referred to the appropriate authorities
for criminal investigation.
2. Duty to Permit Inspection. Each loan recipient which applies for
or receives assistance under this program, upon reasonable request
of the Loan Commission, shall permit duly authorized employees of
Loan Commission and/or the Borough to inspect the plant, books and
records of the business relevant to the Borough's loan funds.
Failure to permit an inspection within 30 days of the request by the
Loan Commission shall constitute a failure of the loan recipient to
meet the terms and conditions of the loan. Failure to permit an inspection
within 60 days will result in default of the loan and it will be subject
to immediate recall.