Loan Guaranty Terms and Conditions

Loan Guaranty Terms and Conditions. A. The amount of the loan guaranty will not exceed eighty percent (80%) of the loan amount or $500,000, whichever is less. The minimum amount will not be less than $50,000. B. The loan guaranty percentage will be determined by the type of loan and the risk profile of the loan. To determine the percentage of guaranty approved for each loan, the guaranty application will be reviewed by MDA’s GCRF Loan Review Committee. The committee will consider credit history, experience, and history of the borrower, collateral coverage, and job creation in its evaluation and will set the guaranty percentage based on these factors. (i) Working capital, lines of credit, and accounts receivable loans will be eligible for a loan guaranty of up to fifty percent (50%). (ii) Loans to finance fixed assets, such as equipment and real estate, will be eligible for a loan guaranty of up to eighty percent (80%), based on the risk associated with the loan. C. Working capital, lines of credit, and accounts receivable loans will have a maximum guaranty term of five (5) years. D. Loans to finance fixed assets, such as equipment and real estate, will be eligible for a guaranty term of up to fifteen (15) years. The term will not exceed the useful life of the assets securing the loan or being financed, with a maximum term of fifteen (15) years. E. The term of the GCRF guaranty shall match the term of the financial institution’s loan, up to the maximum of fifteen (15) years. (Amortization may exceed the loan term). F. MDA shall keep the amount of each loan guaranty in the proper fund in the State Treasury until the loan has been repaid early, there has been a default, or the term of the loan has expired and the loan has been closed.