8.99.511 MICROBUSINESS LOANS - ELIGIBILITY FOR AND TERMS AND CONDITIONS
(2) Full-time equivalent employment of the microbusiness loan applicant will be measured for the purpose of determining eligibility on the basis of the payroll period immediately prior to the loan application date.
(3) All microbusiness loans having repayment terms of more than ten years must be approved by the department.
(4) The interest rate charged to microbusiness borrowers by MBDCs shall be, at a minimum, the highest rate charged by the department to the MBDC for development loans and, at a maximum, the rate of interest that does not exceed the greater of 15 percent or an amount that is 6 percentage points per year above the prime rate published by the federal reserve system in its statistical release H.15 Selected Interest Rates for bank prime loans dated three business days prior to the execution of the agreement. MBDCs will report quarterly, in writing to the department, the interest rate(s) charged to borrowers.
(5) A single loan to a microbusiness shall not exceed $100,000 and the outstanding balance of all loans to a microbusiness or a project participated in by more than one microbusiness or to two or more microbusinesses in which any one principal of the microbusiness holds more than a 20 percent equity share shall not exceed $100,000.
(6) Development loan funds may not be used to refinance a delinquent or nonperforming loan or a portion of a delinquent or nonperforming loan held by a bank, financing company, or the MBDC. Any delinquent debt by the microbusiness loan applicant or any of its principals shall cause the applicant to be ineligible to receive a loan from development loan funds. Development loan funds may not be used to satisfy any delinquency.
(7) Eligible uses of the cash proceeds of a microbusiness loan by a microbusiness include:
(a) business and industrial acquisitions;
(b) business construction, conversion, enlargement, repair, modernization, or development;
(c) purchase of equipment, leasehold improvements, machinery, or supplies;
(d) start-up operating costs and working capital; and
(e) consolidation and/or the paying off of a number of performing loans originated and held by banks, of which the microbusiness is the debtor.
History: 17-6-406, MCA; IMP, 17-6-406, 17-6-407, MCA; NEW, 1992 MAR p. 42, Eff. 1/17/92; AMD, 1993 MAR p. 2236, Eff. 10/1/93; AMD, 1996 MAR p. 2166, Eff. 8/9/96; AMD, 1998 MAR p. 2166, Eff. 8/14/98; AMD, 2000 MAR p. 1045, Eff. 4/28/00; AMD, 2008 MAR p. 486, Eff. 3/14/08; AMD, 2011 MAR p. 1131, Eff. 6/24/11; AMD, 2014 MAR p. 964, Eff. 5/9/14.