Resolution No. 32-2017 - Amended Industrial Revolving Fund Plan

Home Browse Search

Unless waived, anyone owning 20% or more of the applicant business must provide a personal guarantee. This guarantee will pledge all personal assets as security for the IRF loan and, when appropriate, the IRF may take a mortgage or security interest in personal assets. Landlord's lien waiver A landlord's lien waiver will generally be required if the borrower is a tenant. Insurance Adequate Hazard, Liability, and other appropriate forms of insurance will be required on all IRF loans. Additionally, the IRF will obtain a lender's loss payable endorsement on the insurance policy. Key -person life insurance may be required of borrowers and assigned to the IRF as appropriate. 2.3.Standard Equity Requirements Existing and new companies Each applicant will contribute at least 10% of the total project cost as equity. The equity may come from the company's cash on hand or from a cash injection from the owners. New companies may be required to contribute more than 10% equity and, depending on the type of collateral, will generally be required to begin with a debt -to -equity ratio of not more than 6: 1. However, in the case of new, start-up, high tech companies this ratio may be higher. Existing companies will generally be required to have a debt -to -equity ratio of not more than 5: 1. The 10% equity requirement may be waived if. The IRF determines it to be more advantageous for the borrower to retain those funds for working capital purposes or The borrower has other assets available to secure the loan which have sufficient equity value to replace the 10% cash equity requirement or Subordinated debt is provided in lieu of equity or other special situations such as the case of a high tech company where in the judgment of the Board the principals have already made significant investments or commitments to the company. 27