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(a) The division will, in its discretion, use money in the rural development initiative fund to purchase a participation interest in an eligible loan from an eligible lender in accordance with the procedures established in this section. The division will purchase the participation interest at a price equal to principal amount of the participation interest.
(b) The division will purchase a participation interest in an eligible loan under (a) of this section only from an eligible lender and only following (1) receipt and approval by the division of an application submitted to the division by the eligible lender that has made or proposes to make the loan and (2) receipt by the division of the amounts described in (d) of this section. The eligible lender may submit the application in the form of a letter or in any other form that the eligible lender desires as long as the application (1) contains information sufficient for the division to reasonably determine that the loan satisfies or will satisfy the requirements of this chapter, (2) is accompanied by the documentation described in 3 AAC 170.030(c) , (3) states whether the loan is expected to be guaranteed by the Alaska Industrial Development and Export Authority under 3 AAC 99.700 - 3 AAC 99.785, and (4) is accompanied by a nonrefundable application fee of $100.
(c) Unless waived by the division, an eligible lender must submit to the division each of the following documents with respect to an application described in 3 AAC 170.030(b) before the division will agree to purchase a participation interest in the loan to which the application relates:
(1) a loan summary, including the eligible lender's loan approval;
(2) a copy of the signed loan application accompanied by a written release from the borrower consenting to the delivery to the division of the information required by this chapter;
(3) a financial statement, including a profit and loss statement of the borrower's business, that is signed by the borrower and is current to within 90 days of the date on which the division receives the application;
(4) a description of the purpose for which the loan will be made;
(5) a current report of the credit history of the borrower and of any guarantors;
(6) copies of the borrower's federal income tax returns or financial statements prepared by a public accounting firm for the preceding three fiscal years of the borrower;
(7) a description and evaluation of the collateral to be used to secure the loan, including
(A) if the loan is to be secured by real property, a narrative appraisal report acceptable to the division estimating the fair market value of the real property in a format consistent with standards established by the American Institute of Real Estate Appraisers or Society of Real Estate Appraisers including a cost approach, a market approach, and an income approach, or
(B) if the loan is to be secured by tangible personal property, an appraisal in a format acceptable to the division prepared by an appraiser who is acceptable to the division;
(8) a finding that the borrower has adequate projected cash flow to pay all amounts to become due on the loan when and as those amounts become due;
(9) an environmental risk assessment satisfactory to the division followed by an environmental audit if required by the division;
(10) a description of other nonstate sources committed for use on the project or enterprise for which money from a loan will be used;
(11) any other information considered necessary by the division in order to evaluate the borrower and borrower's business.
(d) On or before the date of purchase of a participation interest in an eligible loan, the division must receive a nonrefundable commitment fee equal to one-half percent of the principal amount of the participation to be purchased.
History: Eff. 1/19/93, Register 125; am 6/13/93, Register 126
Authority: AS 44.33.765
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Last modified 7/05/2006