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6 Indirect impact on employment <br />a Increase in local tax base <br />Potential impact on efficiency in a production process or in the provision of <br />services <br />0 Contribution towards diversifying the local economy <br />Potential the project will drive other business activity or that it will attract <br />or create additional businesses <br />• The proposed loan must be consistent with the IRF Plan. <br />• The proposed loan application will capitalize on the regional assets. <br />• The loan will support and advance innovation and that it increases <br />productivity in a particular industry or sector of the economy. <br />• Will approval of the proposed loan maximize private investment that would <br />not otherwise come to fruition without the IRF's investment? <br />Will the proposed loan result in the creation or retention of higher -skill and <br />higher -wage jobs? <br />3. Ability to Repay IRF loan <br />3. I.Analysis of ability to repay IRF loan <br />Based on historical financial information and projected financial information, <br />along with an assessment of management, the IRF will determine the potential <br />for the borrower to generate cash flow sufficient to repay the IRF loan. <br />Loans will not be approved where, in the opinion of the IRF Board, there is <br />insufficient potential to repay the TRY loan. <br />3.2.Collateral coverage <br />A part of the loan selection criteria includes a review of collateral coverage. <br />Since IRF loans are typically subordinated to bank financing and the collateral <br />is discounted for liquidation, these loans are usually under- collateralized. <br />While no specific standard has been set for collateral coverage, each loan being <br />judged on its own merits, collateral may be so insufficient as to justify turning <br />the loan request down. <br />HE <br />