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loan closing date. The borrower will reimburse the IRF for all legal documentation, <br />recording fees, and title work costs. <br />9. Equity and Collateral to be Required of Borrower <br />Each applicant will contribute at least 10% of the total project cost as equity. The <br />equity may come from the company's cash on hand or from a cash injection from <br />the owners. New companies may be required to contribute more than 10% equity, <br />depending on the type of collateral. <br />All or part of the cash equity injection may be waived if - <br />The IRF determines it to be more advantageous to retain those funds for <br />working capital purposes or <br />a Net collateral securing the IRF loan is at least 120% of the loan amount or <br />0 Prior equity investments have been made within the last nine months <br />Company assets <br />As collateral, the IRF will generally secure the loan with the asset being financed. <br />If the asset is real estate, then a mortgage will be taken. If the asset is equipment, <br />accounts receivable, or inventory, then the IRF will take a security interest and file <br />UCC financing statements. <br />If the assets being financed are just accounts receivable and inventory, then a <br />security interest will be taken in these assets. As additional collateral, other assets <br />of the business may be taken to adequately secure the IRF loan. <br />If the company leases its facilities, then a landlord's lien waiver may be required. <br />In some instances, the collateral may be intellectual property. This may be the case <br />for start-up loans to high tech firms. <br />The IRF's Board has approved Collateral Guidelines which are utilized to provide <br />a guide for discounting the collateral to arrive at an estimated liquidation value for <br />collateral valuations presented in loan applications. <br />Key -person life insurance <br />Key -person life insurance may be required, depending on the business owner's age, <br />health, and importance to the business. <br />Personal guarantees <br />Personal guarantees will be required on most all IRF loans, but may be waived if <br />the IRF has a first mortgage or first security interest in assets with an estimated <br />15 <br />