3 AAC 74.045 - Lending practices
(a) The proceeds of the loan may be used by
the borrower for working capital, equipment, construction, or other commercial
purposes relating to the borrower's business.
(b) A loan will not be approved for
refinancing long-term debt. Interim or construction financing is not considered
long-term debt if the term is less than the longer of 12 months or the length
of actual construction and the earliest promissory note or other document
evidencing the creation of the debt was executed less than six months before
receipt of the application by the department.
(c) Loan proceeds may not be used to
reimburse an applicant for purchases more than six months before receipt of the
application by the department.
(d)
The department will set the interest rate for loans under this chapter on the
first day of each calendar quarter. The interest rate set for a quarter remains
in effect until the department changes the rate, will not exceed the maximum or
minimum interest allowed under
AS
44.33.965(b)(2), and will be
established at the nearest one-quarter point. The interest rate will be based
on the prime rate, as defined in
AS
44.88.599, during the previous
quarter.
(e) The interest rate for
a loan is the interest rate in effect at the time the loan commitment is made.
The interest rate for a loan will be at a fixed rate for the term of the
loan.
Notes
Authority:AS 44.33.955
AS 44.33.965
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