Section 10-B5703. GENERAL LOAN REQUIREMENTS

 

5703.1The term of any loan shall not exceed twenty (20) years.

 

5703.2Interest rates on loans shall be set on a project-by-project basis and shall take into consideration the projected cash flow of the business during the term of the loan and the prevailing interest rate at the time of the loan.

 

5703.3Collateral shall be required in an amount to assure reasonable coverage with respect to the amount and duration of the loan. This collateral may be taken in any of the following forms:

 

(a)A lien on real estate;

 

(b)A lien on business or personal assets, or receivables;

 

(c)A pledge of, or warrants or options on equity securities; or

 

(d)Any combination of paragraph (a), (b) or (c) of this subsection, or in such form as the Board deems appropriate.

 

5703.4Each applicant shall show the ability to repay the loan. The recipient's ability to generate the cash flow necessary to service the proposed debt shall receive greater emphasis than the required collateral coverage in the decision to finance a project.

 

5703.5The limit for each loan shall be established at a maximum of three hundred thousand dollars ($300,000) per business or eighty percent (80%) of the project cost, whichever is lower.

 

5703.6Loans shall be used for the purpose of acquiring a business or real property on which a business can be established, and the business acquired or the new business being established shall be in operation after the operator has received a loan.

 

5703.7No loan commitment shall be made until a firm timetable for when the business becomes operational has been established.

 

source

Final Rulemaking published at 34 DCR 2680, 2682 (April 24, 1987).