Sec. 650.45 - Loan and Financial Assistance Administrative Requirements
§ 650.45. Loan and Financial Assistance Administrative Requirements
a) Agreement. A borrower must comply with all terms of the loan or line of credit Agreement, as applicable. A borrower must be able to make all representations, warranties, and covenants set forth in the Agreement. In the event of default under the Agreement, the Department and the borrower may enter into a forbearance agreement at the sole discretion of the Department.
b) Security. The Department may protect its interests in the event of default by requiring personal guarantees from the borrower's principals (all individuals/entities owning or controlling 20% or more of the borrower) or other persons with a material interest in the borrower.
c) Use of Proceeds. The funding made available is to be used for the borrower's ordinary and necessary expenses to start and operate a cannabis business establishment. Proceeds may not be used on capital expenditures unless otherwise approved by the Department.
d) Payments. Payments shall be due and payable to the Department in the method and times specified in the Agreement. Unless otherwise provided in the Agreement, all payments shall be applied first to interest and then to principal on all simple interest loans. All payments on amortized loans will be applied to the amortization schedule as stated.
e) Reporting. A borrower shall provide, at least quarterly, information and reports required by the Department (e.g., reports on job creation/retention; uses of proceeds; financial statement of assets and liabilities; statements of status as a Qualified Social Equity Applicant; and changes in owners, officers and directors).
f) Monitoring and Evaluation. A borrower must permit any agent authorized by the Department, the Illinois Attorney General, the Illinois Auditor General, or any other legal authority, upon presentation of credentials, to have full access to and the right to examine any documents, papers, and records of the borrower involving transactions related to the Program.
g) Records. A borrower shall keep detailed records of the project and the use of proceeds. A borrower of more than $100,000 is required to furnish to the Department, with the periodic submission of financial statements following the expenditure of project funds, a copy of any audit reports received during a specified period. The Department, pursuant to the Agreement, may require a borrower to undergo an audit to verify the use of loan or line of credit proceeds.
h) Performance Requirements. The Department may require a borrower to meet certain economic development objectives (e.g., create a minimum number of full-time jobs within a certain time or achieve certain job quality standards identified in an Agreement).
i) Transfer of License. Loans and lines of credit will not be transferrable, and any outstanding amount owed by a borrower at the time of a transfer of its license shall be paid by the new license holder, along with any waived fees. (See Section 7-25 of the Act.)
j) Confidentiality. Any documentary materials or data made available or received by the Department or any agent of the Department shall be deemed confidential and shall not be deemed public records to the extent that the materials or data consists of trade secrets, commercial or financial information regarding the operation of the business conducted by the applicant or borrower, or any information regarding the competitive position of a business in a particular field of endeavor, or any information, the disclosure of which would be an unwarranted invasion of personal privacy (e.g., criminal history record information or information about the impact of the enforcement of cannabis-related laws on a specific person or family). Nothing in this subsection shall prevent the Department from sharing information with other governmental entities. The names of borrowers and the amounts of any financial assistance shall be considered a public record.(Added at 44 Ill. Reg. 10094, effective May 27, 2020.)
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