HomeMy WebLinkAboutRexburg Revolving Loan's Facade Loan Program Guidelines Proposed Update 8-2-23Rexburg Revolving Loan’s Façade Loan Guidelines
Context
In an effort to help beautify and develop the City of Rexburg’s Downtown, the City of Rexburg created a
Revolving Loan Fund (RLF) and associated Façade Loan program. This fund was intended to be used
primarily for businesses and property owners looking to renew the exterior of existing Downtown
buildings. To date, some questions exist about the lending criteria. What is considered Downtown?
What if the business does not own the building, but is leasing? How much can a business apply for?
How much money can be out on loan at one time or how much should be held in reserves? This
document will answer these questions and give clearer guidelines so that the City, the Development
Company and loan applicants will be able to act on behalf of this resource in the best possible terms for
continued growth and success.
Parties
City of Rexburg, East Idaho Central Planning & Development Association (DBA ALTURA)the Development
Company, other lending partners and applying business or property owners.
Vision Goal
To ensure the most meaningful and resourceful use of the current monies held in the Rexburg Revolving
Loan Fund’s Facade Loan program.
Process Overview
The money is the City of Rexburg’s. The City of Rexburg has contracted with the Development
CompanyALTURA to manage the fund in the most transparent process possible based on the criteria set
forth by the City and it’s Elected Officials. The process will have these major steps:
1. The City of Rexburg will contract with the Development CompanyALTURA to manage the
Rexburg RLF’s Façade Loan program.
2. The Development CompanyALTURA will make available and accept applications for the RLF’s
Façade Loan program based on the outlined criteria in this document.
3. The City of Rexburg will make available existing funds to the Development CompanyALTURA
used for loans.
4. The Development CompanyALTURA will make the City aware of applications made to the
Rexburg RLF Façade Loan program ahead of processing them through the Development
CompanyALTURA’s loan committee.
Specific Guidelines
These guidelines will direct the City and the Development CompanyALTURA as they interact with
potential applicants.
1. The City of Rexburg and the Development CompanyALTURA should encourage all applicants
to first attempt to obtain traditional funding.
2. The business must be in the City of Rexburg’s Downtown as defined as the area from 2nd
East to 2nd West and from 2nd North to 2nd South.
3. This loan will not exceed $25,000 per operating business per store front.
a. The loan can be used for the reconstruction of the front or rear entrance area of
buildings given that:
i. The building owner will sign an agreement (lien) to pay the loan back (they
could pass the cost on to the lessee to cover the cost) and also provide a
personal guarantee, deed of trust, and assignment of lease.
1. If the above requirement cannot be met, an assumption agreement
in the loan agreement would be considered; where it would make
the owner responsible to pay the loan if the tenant was to default
(this option would not allow us to obtain a deed of trust or personal
guarantee).
ii. The amount of all loans will not exceed 110% of latest assessed tax value of
the building.
iii. The rate will be Prime +1/2. At times when the market rates do not align
well with the prime rates, the CFO, Mayor, and Economic Development
Director together may agree to reduce the rate to as low as Prime.
iv. The term will be a 5 year maximum or up to 10 years if lease is that long.
b. The business must still follow all permitting processes and pay all associated fees.
c. The RLF must have a minimum of $300,000.00 150,000 for business loans.
d. The borrower will pay a loan origination fee of 1½ % that is placed back into the loan
fund.
These loans are not normally available to city employees or their spouses to avoid inherent problems that
may arise from this relationship and to avoid potential bias that may exist or be perceived to exist. If the
Development CompanyALTURA Loan Committee feels like the loan would be a viable loan, a loan may be
considered for employees or their spouses as long as all loan criteria as noted above is met.
Last updated 9/13/188/2/2023