If the Finance Committee approves the business development project, the Finance Committee or the Director, on behalf of the state, and the borrower may enter into a loan contract of not more than $1,000,000, secured by good and sufficient collateral (except as noted in OAR 123-017-0030 (Loan Conditions)(1)(c)), as determined by the Finance Committee, that shall set forth, among other matters:
A plan for repayment by the borrower to the Oregon Business Development Fund moneys borrowed from the Fund used for the business development project with interest charged on those moneys at the fixed rate of one percentage point more than the prevailing interest rate on United States Treasury bills, notes or bonds of a comparable maturity. Loans made from the Oregon Targeted Development Account shall be made at a fixed interest rate of four percentage points less than the prevailing prime rate. Loans made under the conditions of OAR 123-0017-0015(10) shall be made at a fixed interest rate of not less than five percentage points over the prevailing prime rate. The rate on any loan shall not be less than four percent. For the purposes of this section, the prevailing interest rate shall be the last published daily interest rate as set forth in the most recent Federal Reserve Statistical Release H.15(519) that the Department has received at the time the loan is approved. The repayment plan, among other matters:
Shall provide for commencement of repayment by the applicant of moneys used for the business development project and interest thereon no later than one year after the date of the loan contract or at such other time as the Finance Committee may provide;
May provide for reasonable extension of the time for making any repayment in emergency or hardship circumstances if approved by the Finance Committee or the Director;
Shall provide for such evidence of debt assurance of, and security for, repayment of the loan as is considered necessary by the Finance Committee;
Shall set forth a schedule of payments and the period of loan which shall not exceed the usable life of the contracted project or 25 years from the date of the contract, whichever is less. The payment schedule shall include repayment of interest that accrues during any period of delay in repayment authorized by subsection (a) of this section, and the payment schedule may require payments of varying amounts for collection of accrued interest. The term of the Fund loan will normally be matched to, and not exceed twice that of, the commercial or private lender participating in the project, if applicable. Loans from the Oregon Targeted Development Account shall be for a maximum term of 5 years, with a maximum amortization of 15 years. Loans made under the terms of OAR 123-017-0015 (Eligibility)(10) shall be for a maximum term of 5 years, with a maximum amortization of 20 years.
A request to renew any loan from the Fund that has reached its scheduled maturity and has not been repaid in full may be approved by the Finance Committee (or Director if the principal balance does not exceed $250,000), with any additional terms and conditions, including interest rate, that it may determine. A new application, including an application fee and supporting documentation, are required to initiate review of the request.
Shall set forth a procedure for formal declaration of delinquency or default of payment by the Department. Loans shall be declared delinquent when any payment is more than ten days late. Borrower shall be notified in writing of declaration of delinquency, and shall have 31 days from the original payment date to bring the loan current. If the loan is not brought current, or arrangements satisfactory to the Department for bringing the loan current have not been made, the Department may declare the loan in default, declare the entire outstanding indebtedness to be forthwith due and payable and assign the loan to the Attorney General for collection; The Finance Committee or the Director or their designee is authorized to approve any modification of terms on a loan that is delinquent or in default as deemed necessary or prudent to most likely effect repayment of the loan to the Fund.
May allow for forms of payment on loans other than scheduled principal and interest payments, as determined by the Finance Committee, or Director in the case of loans of $250,000 or less.
Provisions satisfactory to the Department for field engineering and inspection, the Department to be the final judge of completion of the contract.
That the liability of the state under the contract is contingent upon the availability of moneys in the Oregon Business Development Fund for use in the business development project.
Such further provisions as the Finance Committee considers necessary to ensure expenditure of the funds for the purposes set forth in the approved application.
That the borrower is responsible for payment of:
All of the expenses of the operation and maintenance of the project, including adequate insurance;
All taxes and special assessments levied with respect to the leased premises and payable during the term of the lease;
Insurance premiums and providing insurance in amount and coverage acceptable to the Finance Committee. Such insurance shall include but shall not be limited to: fire and hazard insurance, liability insurance and flood insurance (if applicable); and
Out-of-pocket costs associated with the loan closing which may include but are not limited to filing and recording fees, title insurance and appraisals, and attorney fees.
That the borrower will provide to the Department on an annual basis, within 120 days of the end of its fiscal year, the same type of financial statements as required by the participating bank. The Finance Committee or the Department may require additional financial information.
The Finance Committee, or Director for loans under $250,000, may require an assignment of life insurance on active principals in borrower.
The Department, at its sole discretion, may require the execution of a Commitment Letter and receipt of a non-refundable Commitment Fee to secure resources necessary to fund the loan. The Commitment Fee will be applied at closing to the loan fee. If the loan does not close, the Commitment Fee will not be refunded.
In the case of loans of more than $100,000 that are funded by proceeds from the Oregon Lottery, that the borrower shall make a good faith effort to hire and retain low-income individuals who have received job training assistance from publicly funded job training providers and enter into a first-source hiring agreement with a publicly funded job training provider.
If the loan will result in the construction, expansion, rehabilitation or remodeling of a facility to which the public has access, adequate access for handicapped persons must be provided. This provision applies only to firms that deal directly with the general public in the normal and usual course of their business, and to facilities in which business is customarily transacted by and with members of the general public.
If a project involves building construction, expansion, rehabilitation or modification, a loan from the fund shall be permanent and not interim financing.