The Ortonville Revolving Loan Fund

It is the mission of the Economic Development Authority (EDA) to assist in stimulating the economy of Ortonville and improving the overall quality of life in the community. One means of accomplishing this is by providing gap financing from the City of Ortonville Revolving Loan Fund (RLF) to both new and expanding businesses. The fund makes loans with the intention that such loans will be instrumental in the creation and/or retention of jobs within new and existing businesses.

The EDA will provide fair and equitable lending opportunity to all potential applicants and assist in identifying creative and alternative financing techniques to all businesses and individuals applying for funds from the RLF. Not only will these funds be used for direct loans, but also as matching funds to enable the City to receive additional monies from other sources.

The RLF was initially created by a grant from the Minnesota Department of Trade and Economic Development. Since that time, additional funding has been provided from the City of Ortonville’s utility reserve fund.

The RLF is not intended to be in direct competition with any traditional lending or financial institutions. The fund has been established to offer loans to businesses that might, without the benefit of gap financing, otherwise be considered a high risk by lending institutions. It is the goal of the EDA to establish and maintain good relations with all lending institutions, as well as cooperative and harmonious association with other community groups and organizations that are working to improve the economy of the area.

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REVOLVING LOAN FUND GUIDELINES

Goals and Objectives
To create or retain permanent jobs
To provide gap financing for business development and expansion

The following materials will be submitted by the applicant:

EDA RLF Committee reviews loan application and forwards their recommendation to the EDA Board.

EDA Secretary notifies applicant of EDA Board action.

EDA Secretary and/or City Attorney will prepare documents and file security agreements.

Checks will be received at the time of closing.

Press release will be given to the media.

EDA Secretary will monitor the loan and make regular reports to the EDA Board, particularly notifying the Board of any problems with clients making payments, etc.

EDA Secretary or RLF Committee Member(s) will make annual visits to the borrower’s business.

Applicant should allow for at least a 30-day timeframe once the completed application and all required documentation is submitted. An EDA representative will assist the applicant through all stages of the application process.

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Business Credit Check – Application Process Procedure

Applications for business assistance requires obtaining credit reports and credit references, both on the company and owners holding 20% or more of the company. Some or all of the items in #1-8 may be accessed to determine credit worthiness.

Conduct a name search with the County Recorder’s office (and/or Registrar of Deeds) where the business is presently located to identify any filings of public record against the business. It may be necessary to go to several surrounding counties depending on the information received. For the majority stockholders, a name search should be undertaken in the counties where the individuals reside (or have resided in the past.) Individuals providing personal guarantees are generally the majority stockholders owning 20% or more of the company. The County Recorder’s records will identify liens which may include:
                                        State tax liens
                                        Equipment liens
                                        Real estate liens

Conduct a lien search with the Secretary of State.

Conduct a name search with the Criminal Clerk of Court in the county where the business is located and where the majority stockholder(s) reside (or have resided in the past.) The Criminal Clerk of Court will identify court actions taken in regard to the business and stockholder(s). Conduct a name search with the Civil Clerk of Court to identify any pending action against the company or stockholder(s).

To determine if there is a pending law suit, conduct a name search of the business and majority stockholders through the US District Court. St. Paul 651-848-1100, Mpls. 612-664-5000, Duluth 218-529-3500

Contact "local" bankruptcy court to determine if company or owners have filed for bankruptcy protection. Web site: www.mnb.uscourts.gov or 1-800-959-9002

Obtain a Dunn and Bradstreet report on the business requesting assistance.

Obtain supplemental reports (letters and telephone calls to credit references) when other channels of information do not clearly indicate the credit history of the business.

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Ortonville Electric Rebate Policy

Electric Rebate Policy Effective Date: March 28, 2001

Benefactor can receive up to fifty percent (50%) rebate of paid electric bill for the first twelve (12) months of the business opening.

This rebate policy applies only to new or expanding businesses with new businesses being defined as one that has not operated under previous ownership in Ortonville.

1. Any new or expanding business that creates a minimum of five new jobs in the city limits of Ortonville.
2. The percent of rebate will be determined as follows: 5 jobs = 25%; 6 to 10 jobs = 35% and 10+ jobs = 50%
3. Rebates will be received once the applicable employee level is reached and those employees begin receiving wages.

1. Submit a completed EDA Electric Rebate Application Form to the EDA Office. The EDA Board will review for approval.
2. Electric bill(s) must be paid in full prior to the rebate being issued.
3. A copy of the electric bill(s) must be presented to the EDA office on or before the first Monday of the month. If a bill is received after the first Monday of the month, the rebate will be issued the following month.

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Border City Enterprise Zone Tax Credits

Purpose:

To provide business tax credits to qualifying businesses that are the source of investment, development, and job creation or retention in the City of Ortonville.

Types of Tax Credits

Applications Accepted.

Annually on approximately August 1.

Eligible Applicants.

Business owners.

Approving Authorities.

Ortonville City Council and Minnesota Department of Trade and Economic Development.

Funds Disbursement.

Through the State of Minnesota Department of Revenue via a state income tax refund.

Definition of Eligibility.

To be eligible to receive credits, applicants must fall within one of the categories defined as follows:

Retention of Existing Business

Economic Growth of Existing Business

Determination of Tax Credit Allocation Amount.

Each application is evaluated by the Border City Tax Committee and recommendations are forwarded to the City Council for approval and submission to DTED for final approval. The value of credits to be allocated, if any, is determined by the amount of credits remaining in the City’s existing allocation from the State. The following guidelines will be used as a general basis for determining local tax credit allocation levels:

New Business & Economic Growth

Retention of Existing Business

Recapture of Awarded Credits.

Minnesota statute requires that "Any business that (1) receives tax reductions… and (2) ceases to operate its facility located within the enterprise zone shall repay the amount of the tax reduction… received during the two years immediately before it ceased to operate in the zone.

Who to Contact.

Ortonville Economic Development Authority.
eda@ortonville.net