If the Director approves the loan, the Director, on behalf of the state, and the borrower may enter into a loan contract of not more than $75,000, secured by Collateral, which shall set forth, among other matters:
A plan for repayment by the Borrower to the Fund of monies borrowed from the Fund used for the Project with interest charged on those monies at a fixed rate of at least two percentage points (2%) more than the prevailing bank prime interest rate. For the purposes of this section, the prevailing bank prime interest rate shall be the rate set forth in the most recent Federal Reserve Statistical Release H.15(519) which the Department has received at the time the loan is approved. Notwithstanding the foregoing, the interest shall not exceed 18 percent per annum. The repayment plan, among other matters:
Shall provide for commencement of repayment by the Applicant of monies used for the Project and interest thereon no later than six months after the date of the loan contract or at such other time as the Director may provide;
May provide for reasonable extension of the time for making any repayment, not to exceed six months, in emergency or hardship circumstances if approved by the Director.
Shall provide for such evidence of debt, assurance of and security for, repayment of the loan as is considered necessary by the Director;
Shall set forth a schedule of payments and the period of the loan which shall not exceed the usable life of the assets financed or ten years from the date of the contract, whichever is less. The payment schedule shall include payment of interest which accrues during any period of delay in repayment authorized by subsection (b) of this section, and the payment schedule may require payments of varying amounts for collection of accrued interest;
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, may declare the entire outstanding indebtedness to be forthwith due and payable and may assign the loan to the Attorney General for collection. The Department shall inform the borrower of each default and action taken in connection therewith. The Director may in his or her sole discretion waive or delay such assignment.
Provisions satisfactory to the Department for field engineering and inspection, the Department to be the final judge of completion of the Project;
That the liability of the state under the contract is contingent upon the availability of monies in the Fund for use in the Project;
Such further provisions as the Director considers necessary to insure expenditure of the funds for the purposes set forth in the approved application;
That the Department may institute appropriate action or suit to prevent use of the facilities of a Project financed by the Fund if the Borrower is delinquent in the repayment of any monies due the Fund;
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 business or the Project;
Insurance premiums and providing insurance in amount and coverage acceptable to the Department. Such insurance shall include but shall not be limited to: Fire and hazard insurance, liability insurance, and flood insurance if applicable at the sole discretion of the Department; and
All out-of-pocket costs associated with the loan closing including but not limited to filing recording fees, title insurance and appraisals.
That the Borrower will provide to the Department on an annual basis, within 120 days of the end of each fiscal year, financial statements prepared in accordance with generally accepted accounting principles. In addition, copies of federal tax returns may be required to be submitted annually. The Department may require additional financial information or more frequent financial statements;
In the case of a loan made to an association, corporation or partnership, each partner and each owner of 20 percent or more of the corporation or association will provide a personal guaranty for the payment of all interest and repayment of principal amount of the loan unless the Director in his or her sole discretion, expressly waives such requirement;
The Department may, in its sole discretion, disburse the proceeds of an approved loan in such amounts and at such times as the Department feels necessary to ensure that loan proceeds are used for the stated purposes and to preserve the integrity of the Fund. If the Department in its sole discretion determines that the financial condition of the Borrower has deteriorated since the eligibility and application process was commenced, the Department shall be under no obligation to disburse any loan funds.[Publications: Publications referenced are available from the agency.]