Guarantee Application Process

Guarantee Application Process. A borrower must first identify a partnering financial institution that is willing to participate in the SBLGP and its parameters. The MDA staff may provide a list of participating lenders should the borrower need it. The financial institution will originate the guarantee application for an eligible business and loan and all required documentation. This must include: • A loan narrative describing the project, • An overview of the business, • The purpose of the loan, and • The proposed use of the loan proceeds. The financial institution must provide MDA with a Servicing Agreement Letter, certifying to act as the collection and service agent for the guaranteed loan and agreeing to program terms and conditions. All transactions will be presented for consideration to the MDA’s Small Business Loan Guarantee Review Committee. The committee will review each application and determine the guarantee percentage for the loan, based on credit history, experience and history of the borrower, collateral coverage, and job creation. Once the review committee has approved a guarantee application and percentage, the guarantee commitment is valid for ninety (90) days. If the loan has not closed within ninety (90) days, updated information may be required, and the loan may be resubmitted to the review committee for approval before the loan can proceed to closing.