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HASTINGS ECONOMIC DEVELOPMENT FUND GUIDELINES <br /> CITY OF HASTINGS <br /> 101 East Fourth Street <br /> Hastings,Minnesota 55033-1955 <br /> (651)4374127 <br /> INTRODUCTION <br /> The purpose of the Hastings Economic Development Fund (HEDF) is to encourage economic <br /> development by supplementing conventional financing sources available to existing and new <br /> businesses. Through this program, administered by the City of Hastings and participating lending <br /> institutions(s), loans are made to businesses to help them meet a portion of their financing_needs. <br /> All loans must serve a public purpose by complying with four or more of the criteria noted in the <br /> next section. It is the responsibility of the City to assure that loans meet the public purpose <br /> standard and comply with all other HEDF policies as defined in this document. Along with <br /> establishing the definition of public purpose, this document is designed to outline the process <br /> involved in obtaining HEDF financing. <br /> BACKGROUND <br /> Revolving loan funds (RLF's), in particular, have become an increasingly popular business <br /> financing tool because of their ability to leverage public and private dollars and recycle funds as <br /> well as their flexible design and simple operation. RLF's provide funis with direct loans, loan <br /> guarantees, interest subsidy and other financial assistance. As the RLF receives the principal and <br /> interest from outstanding loans, the money is made available to another borrower. This recycling <br /> of funds makes RLF's particularly valuable in light of the growing scarcity of development funds. <br /> RLF's are designed to alleviate the high cost and short supply of capital for community businesses <br /> by providing flexible loan terms. Typically, RLF's lower the rate, lengthen the term, or reduce the <br /> risk of a loan. By increasing accessibility to capital,RLF's help firms expand, develop or remain in <br /> the community. By providing critical subordinate financing for a loan package instead of 100 <br /> percent direct financing, RLF's are an effective tool for leveraging. RLF loans are typically <br /> combined with other public or private dollars. <br /> All activities funded through the RLF will meet one of the following objectives: <br /> a. Benefit to low and moderate income persons; <br /> b. Prevention or elimination of slums and blight; <br /> C. Alleviate of urgent community development needs. <br /> Projects funded by the RLF are intended to create or retain jobs that are taken by or available to low <br /> and moderate-income persons. <br />