HAR §15-5-8. Consideration and review of applications

(a) Applications for loans shall be considered only when the requirements of section 15-5-6 have been met and there is evidence that the loan is not available on reasonable terms from other sources. The loan applied for shall be deemed to be otherwise available on reasonable terms, unless the applicant provides proof of refusal of all or a part of the required loan from the financial institutions of which one should be the institution currently dealt with. Proof of refusal shall contain the date of application, amount requested, and the financial institution's reasons for not granting the desired loan and shall be signed by an authorized official of the financial institution. The financial institution's refusal to advance credit shall not be considered the full test of unavailability of credit. Where there is reason to believe that credit is otherwise available from sources other than the financial institution, the loan applied for may not be granted notwithstanding the receipt of a written refusal from the financial institution. (b) The department need not consider an application for a loan if the amount of loan required is obtainable: (1) On reasonable terms through the public offering or private placing of securities by the applicant; or (2) Through the disposal at fair price of assets not required by the applicant in the conduct of its existing business or not reasonably necessary to its potential healthy growth; or (3) Without undue hardship through utilization of the personal credit or resources of the applicant; or (4) Through other applicable financing. (c) The department shall not approve a loan unless the applicant provides reasonable assurance that the loan can and will be repaid pursuant to its terms. Reasonable assurance of repayment shall be based upon consideration of the applicant's record of past earnings or projections of future earnings which indicate that the applicant will be able to repay the loan from the income of the business. (d) The department shall not approve a loan unless the applicant provides evidence of clear title to the invention or product and that there will be no infringement of patent rights or copyrights of others. (e) Applications meeting the requirements enumerated above and in the foregoing sections of this chapter shall be reviewed by the staff of the financial assistance branch of the business services division of the department for its recommendation before final approval or disapproval by the director. (f) An applicant shall not be required to pay any fees in connection with filing an application, but shall be required to pay for such costs as appraisals, title searches, documentation of mortgages, patent searches, and any other work required in processing the loan which is not performed by the department. When determined to be necessary by the department, an applicant shall be responsible for hiring independent appraisers to determine the value of capital assets or to assess the economic feasibility of commercial exploitation of the applicant's product or invention. [Eff. APR 03 1982; am and comp DEC 21 1989] (Auth: HRS §211E-2) (Imp: HRS §211E-2)