§ 2-90. Eligibility requirements.

(a)

Eligible applicants for RLF assistance include:

(1)

Any legal entity, individual, public and private organization, or any federally recognized Indian tribal group which resides or desires to locate within the county.

(2)

Applicants will be considered without regard to race, color, religion, sex, national origin, age, handicap condition, familial status, or marital status.

(3)

Applicants must demonstrate that the project to be financed will result in private-sector job creation or retention and contributes to the economic development efforts of the board of county commissioners.

(4)

Applicants must demonstrate that the request is necessary or appropriate as defined in 24 C.F.R. Part 570. (Exhibit 1-A attached Ordinance No. 91-5 must be completed and submitted with all the applications.)

(5)

Applicants must demonstrate the request meets a national objective as defined in 24 C.F.R. Part 570. (Exhibit 1-B attached to Ordinance No. 91-5 must be completed and submitted with all applications.)

(b)

Eligible activities for RLF assistance include:

(1)

Acquisition or construction of commercial and industrial buildings and structures with at least a ten (10) percent equity infusion with preference for location being given to the Flagler County Airport Industrial Park.

(2)

Purchase of capitalized machinery and equipment with a useful life of at least five (5) years after a minimum of at least a ten (10) percent equity infusion.

(3)

Acquisition of real property with at least a ten (10) percent equity infusion by the borrower.

(4)

Construction of a business incubator to provide inexpensive space and assistance through the Service Core of Retired Executives (SCORE) and similar groups to new firms to help them become viable businesses.

(c)

Ineligible activities for RLF assistance include:

(1)

Speculation activities such as land banking and the construction of speculative or unleased buildings or building without a letter of intent.

(2)

Loans for the purpose of investing in high interest accounts, certificates of deposit, or other investments not directly related to job creation.

(3)

Loans which would create a real or even potential conflict of interest for any officer or employee of the county or any current or former member of the revolving loan fund committee provided in section 2-91, or staff who reviews, approves, or otherwise participates in decisions on RLF loans.

(4)

Second loans to any applicant who was an original recipient of a community development block grant loan from the county and whose repayment is to be a capitalization source of the RLF.

(5)

Purchase or reconstruction of any building, the primary purpose for which will be the general conduct of local or state government or whose initial occupant is any local or state governmental unit, agency, instrumentality, or subdivision.

(d)

The RLF capital shall be used only for debt financing through direct loans. RLF capital cannot be used to:

(1)

Purchase or refinance stockholder equity in private businesses.

(2)

Subsidize interest payments on existing loans.

(3)

Refinance loans made by the RLF.

(4)

Finance working capital, inventory, or supplies.

(5)

Purchase of an asset owned by the applicant or a principal of the applicant.

(e)

The RLF program is available to make loans to eligible borrowers at the following interest rates and under the following terms determined by the commission to be most appropriate in achieving the goals of the RLF:

(1)

The interest rate may be from three (3) to five (5) percent below the prime interest rate on the date of loan application but in no case may the interest rate be less than five (5) percent.

(2)

Where necessary, RLF financing may be designated to assist applicants with special credit problems, and therefore may involve greater risks and more lenient terms rather than conventional financing. Nothing in this section should be interpreted to encourage or advocate loans to individuals or firms with adverse credit histories or who are insolvent.

(3)

The RLF income will not be commingled with other county funds or with program income from other community development block grant, non-economic development activities. Separate interest bearing accounts for all grant disbursements and receivables will be established for this purpose.

(f)

In the determination of collateral requirements, the commission shall consider the merits and potential economic benefits of each request. When appropriate and practical, the RLF financing shall be secured by liens, mortgages, or assignments or rights in assets of assisted firms as follows:

(1)

The lien position of the RLF may be made subordinate to and made inferior to liens or a lien securing other loans made in connection with the project prior or concurrent with the RLF loan.

(2)

The RLF shall obtain collateral such as liens on land, buildings, equipment, inventories, receivables, or other available assets of applicants. Such liens may be subordinate only to existing liens of record and other loans involved in the project in accordance with the terms of the RLF contract and loan documents between the applicant and the jurisdiction.

(3)

In addition to the above types of security, the RLF may require security in the form of assignment of patents and licenses, the acquisition of hazard and other forms of insurance, and such other additional security as the commission determines is necessary to protect the RLF's interest.

(4)

RLF loan requests submitted by closely held corporations, partnerships or proprietorships dependent for their continuing success on certain individuals will be expected to provide and assign life insurance on these key persons to the RLF. The key man policy will be paid up front for the term of the loan.

(5)

Personal guarantees shall be required from principal owners and their spouses.

(Ord. No. 91-5, § 5, 4-22-91)