HAR §15-2-13. Local development company loans

(a) The department may make loans to local development companies approved by the SBA as qualifying for loans under section 502, 503 and 504 of the SBIA. In order to qualify for loans, the local development company shall have the sole purpose of enhancing the economic growth of the geographic area in which it is chartered to operate. The loan made by the department may represent a portion of the local development company's private capital which must be raised before any loan will be approved by the SBA. (b) Any local development company which has become incorporated under the state corporate law and which satisfies the qualifications required by the SBA shall be eligible to apply to the department. (c) The loan made to a local development company may be made for assistance to any identifiable small business only for the purpose of land acquisition, construction, machinery, and equipment. However, each such loan to a local development company shall be subject to the following restrictions: (1) Loans for any single project shall be of such an amount as determined by the department to be necessary and proper, but in no instance shall be more than twenty per cent of the total cost of the project or any other maximum established by law; (2) The terms of the loan may be for a period of twenty-five years plus construction time, which time may be extended, at the discretion of the director, for a period up to, but not in excess of, ten years; or for such a period as that in effect for local development company loans by the SBA at the time of the making of the loan; (3) The interest shall be determined by the director, but shall not be less than the annual rate in effect by the SBA for local development company loans at the time of the making of the loan; (4) The initial payment of principal may be made concurrent with or placed in a standby position to the SBA loan. Interest shall be paid concurrently with the SBA loan; (5) The department shall ensure that all terms and conditions of any loan made to a local development company shall conform as closely as possible to those prescribed the SBA subject to the State restrictions. (d) The local development company to whom a loan has been granted shall submit to the department annual financial statements during the life of the loan and interim financial statements and reports as may be required by the department. [Eff. JUL 6 1981; am and comp DEC 21 1989] (Auth: HRS §210-4, §210-5) (Imp: HRS § 210-7)