TITLE
Recommendation to authorize City Manager, or designee, to execute all necessary documents to implement a fully amortized loan in the amount of $300,000, at a fixed interest rate of 5 percent per year and a term of 15 years, to McKenzie Crematory, Inc., located at 1520 Seabright Avenue. (District 1)
DISCUSSION
In 1987, the City Council authorized the establishment of the Commercial and Industrial Revolving Loan Fund Program (Program). The Program was originally capitalized by the U.S. Department of Commerce, Economic Development Administration (EDA), Community Development Block Grant (CDBG) and former Redevelopment Agency (RDA) tax increment funding. The purpose of the Program is to provide access to capital to retain, attract, expand and create businesses in Long Beach. Financing under the Program supplements, but does not replace, private lending. Since its inception, more than 300 loans have been funded, totaling more than $32 million. Oversight responsibility for the Program was given to the Economic Development Commission (EDC), which established guidelines for the Program and delegated detailed loan review to its Business Loan Committee (Committee). Based upon the Committee’s recommendation, the EDC acts on the loan application and, if approved, recommends them to the City Manager for approval and processing. Loans in the Program exceeding $100,000 require authorization by the City Council.
The proposed loan will be in the amount of $300,000, at a fixed interest rate of 5 percent per year and a term of 15 years, to McKenzie Crematory, Inc., (Borrower). The loan will augment a $1,065,000 Small Business Administration (SBA) guaranteed loan funded by the Grow America Fund (GAF), which was approved by the GAF loan committee on September 22, 2016. The GAF loan allows for nine months of interest-only payments, followed by principal and interest payments starting on the tenth month.
The City loan will be secured by the unlimited personal guaranty of...
Click here for full text