Agenda Packets - 1995/06/05 - Laserfiche WebLink

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'VMSW DISPOSITION REQUEST FOR COUNCIL CONSIDERATION STAFF REPORT AGENDA SESSION DATE June 5, 1995 Agenda Section: Report Number: 95-1362WS 6. 6-1-95 Report Date: Item Description: Discussion of Business Loan for Dynex Industries Administrator's Review/Recommendation: Li'9-' - No comments to supplement this report - Comments attached. Explanation/Summary (attach supplement sheets as necessary.) SUMMARian Sjoberg approached me several months ago regarding Mounds View's assistance in the expansion of their facility on Mustang Circle. As you recall, we applied for an Economic Recovery Grant on their behalf. Dynex was unable to meet the new employee requirement under the State's program. Since Dynex is consolidating several Minnesota operations in Mounds View, they were unable to count those positions under the State guidelines. Since then, Dynex has been working with St. Paul/Metro East Development Corporation on a SBA 504 program. Under the SBA 504 program 60% of the project costs are covered by a Small Business Administration Loan, 40% by Bank financing and 10% Company Equity. The SBA will accept City revolving loan funds as a portion of the companies equity. Mounds View's Small Business Loan Program, if approved, will quality under SBA's program to assist a growing, quality business in Mounds View. The premise around business financing is to limit the amount of cash the company invests into the financing of an expansion. This will enable the company to maximum its cash for operations taking into consideration the additional business generated as a result of the expansion. The St.Paul/Metro East Development Corporation has done a full analysis of Dynex Industries financials and has secured personal guarantees from all three principals. I have included a copy of their executive summary for your review. In addition, North Star Bank, who has had a long financial working relationship with Dynex, have approved their 40 % of the package and participation in the Cities program, if it is approved. Dynex Industries would like to break ground in late June. Therefore, this item is before you at the work session in anticipation that the program will be approved and the funds will be distributed as outlined in prior staff reports. If you have any questions regarding this transaction prior to the meeting please feel free to call me. Dynex and a representative from North Star Bank will be at the work session. Cathy Be f ttj Economic Development Coordinator RECOMMENDATION;