First Capital Challenge Announces Winners
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Read about entrepreneurs following their dreams in Kingston
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Terms of Award
Each loan recipient will, as a condition of accepting the loan, enter into an agreement with First Capital Community Development Inc. (operating as First Capital Challenge, "FCC"), within 3 months of the announcement of the award and in a form acceptable to the legal counsel for FCC, in which the recipient will agree:
- To borrow from First Capital Challenge the amount awarded,
- To make minimum payments on the loan, within three months of the end of each fiscal year, in an amount equal to 1% of sales for that fiscal year,
- Payments will be used to pay back the principal amount first until fully repaid, and thereafter to pay the acummulated interest until fully paid.
- Interest accrues annually at 10% of the outstanding principal and interest balance to a cummulative maximum interest equal to the amount awarded.
- To submit to First Capital Challenge with each payment, documentation confirming sales such as independently reviewed financial statements, annual tax filings or assessment notices,
- To secure the loan under a General Security Agreement with the assets of the business,
- To give FCC immediate notice if any of the following Triggering Events occur, or if planned, then 60 days prior notice:
- Not submitting a required payment and/or associated documentation.
- Change of ownership.
- Departure from the business of a founder or key employee.
- Ceasing operations in Kingston.
- Reduction of the percentage of full-time employees and founders in Kingston to less than 30% of the total.
- If notice of a Triggering Event is due, to pay to First Capital Challenge within 30 days the full outstanding principal and interest balance unless other terms are mutually agreed, and
- To such other customary terms deemed appropriate by the legal counsel for FCC.
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