[R.O. 2011 § 630.010; 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]
A.
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 language
in Chapter 620, RSMo.
B.
Eligibility.
1.
The Owensville Board of Aldermen, consistent with Sections 620.1350
to 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.
2.
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:
a.
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.
b.
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.]
c.
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.
d.
The private to MODAG funds ratio may not be less than two and
five-tenths to one (2.5:1) unless otherwise determined by the Board
of Aldermen. The MODAG loan can be no lower than second in terms of
lien priority.
e.
The applicant must present a but-for causation statement. (But
for the program funds, the business cannot commit to this project/activity.)
f.
MODAG funds must be used in the least amount needed to gain
any private commitment of funds necessary.
g.
The applicant must pay a non-refundable loan processing fee
of two hundred fifty dollars ($250.00) plus all attorney and recording
fees established by the MODAG Loan Review Committee.
h.
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.
i.
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.
j.
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 five-tenths percent (0.5%). The Board of Aldermen
will review rates at any time deemed necessary.
k.
Applicant must provide a complete financial report.
l.
Applicant must provide three (3) years of tax returns.
m.
Applicant must provide a credit report using creditreport.com.
n.
Applicant must sign a personal guarantee and security agreement.
o.
All criteria above must be met or loan is callable.
C.
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.
D.
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.
